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Pbadengers are waiting to take a Hertz shuttle to the Los Angeles International Airport.
Patrick T. Fallon | Bloomberg | Getty Images
The Hertz Global Holdings stock jumped more than 8% on Tuesday after the car rental company announced a new subscription service called Hertz My Car, which will be launched as a pilot program in Atlanta and in Austin, Texas.
Hertz is up more than 5% in the last 12 months and more than 12% since the beginning of the year.
The monthly subscription service is an alternative to traditional vehicle ownership, which, according to the company, has become less popular in urban areas. This will cost subscribers between $ 999 and $ 1,399 a month, depending on the type of vehicle chosen.
The pilot program will provide customers with access to various cars through the two subscription levels and allow them to exchange vehicles twice a month for different models. The subscription will cover vehicle maintenance, roadside badistance, damages and limited liability protection, the company said.
Hertz said the service was part of a more pronounced shift in the possession of traditional vehicles. The company shared a poll of Cox Automotive that said about 40 percent of respondents said that if access to transportation is required, possession of a vehicle is not.
"We feel well positioned to lead the vehicle subscription services," said Jayesh Patel, senior vice president of branding at Hertz. "We have seen growth in our long-term rentals over the past few years, which we believe is one of many positive indicators that the timing is right for this service."
Hertz shares have fallen more than 20% since early March, when its longtime investor, Carl Icahn, announced that he has reduced his stake in the company.
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