As the travel industry tanks and rental car agencies ask for relief from the federal government, their fleets of rental cars sit, largely unused, on their lots. But rather than let them gather dust, Hertz will start offering them out to healthcare workers to get to work for free.
The program will start in New York City this week, which is considered to be the epicenter of the COVID-19 outbreak in the United States, reports the Wall Street Journal. For those who usually take public transit to get to their jobs, the option of taking a car can minimize potential exposure to the virus.
And the cars really do seem like they’re just sitting around. Because of a sharp decline in air travel, Hertz CEO Kathryn Marinello says only about 20 percent of the company’s rental cars are being used nationwide. It’s normally more like 80 percent.
Things don’t look good at Hertz (or any rental car company, really). Hertz lowered the minimum age to rent a car from 20 to 18 last week, removed the fees usually tacked onto renting to younger people in order to up demand, and is “scrambling to cut all discretionary expenses,” according to the Journal.
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Two days ago, Bloomberg reported Hertz and Avis had started laying off employees. The Hertz furloughs started at midnight on March 21. From the story:
Hertz is laying workers off without pay, though they will keep their medical benefits, Stone said. The company also is cutting discretionary spending and getting rid of some cars in its fleet, he wrote, because rental volumes have plummeted.
The federal aid package Hertz and other rental car companies have requested involve tax deferments, temporary rent relief they normally pay to the airports, and grants for liquidity problems.
“In a crisis, I think it’s so important to give employees an outlet to be part of the solution,” Marinello told the Journal in an interview. She expects the free car program to expand to other cities as “hot spots emerge.” Though I think we can all agree that no more hot spots would be great.