On the streets of San Francisco, the self-driving car race is underway.
In the last year, certain companies have jetted ahead while others have taken a sharp nosedive.
Ford took a leading position when it doubled down on its artificial intelligence (AI) commitment through the acquisition of AI startup Argo AI.
Uber, once a major competitor, has crashed and burned. The resignation of its CEO last week left the company scrambling.
And then there are the new contenders.
After a year of denying that it was working on self-driving technology, Apple officially joined the pack.
The iPhone maker received a license from the state of California to test its self-driving technology in April. Not long after, three Apple-powered cars were roaming the streets.
And Apple just made another big power play.
The company signed a deal with car rental company Hertz. This move could not only push Apple ahead in the self-driving car race, but it could also signal a transformation in the entire industry.
The dying car rental industry could become very lucrative…
The Apple Fleet Powered by Hertz
I know many people — both investors and consumers — who would love to see Apple win the self-driving car race.
Now, the Hertz deal could help Apple fulfill that vision.
The deal will allow Apple to lease a small fleet of Lexus RX 450h from Hertz. These cars will be equipped with Apple’s self-driving car technology.
This is the second partnership between a self-driving car company and a car rental company.
Alphabet’s Waymo has a partnership with Avis, which grants the car company the right to run Waymo’s fleet of autonomous cars in Phoenix, Arizona.
Such partnerships could quickly become mainstream, with many technology companies putting cars on the road through rental companies.
For Hertz, the Apple deal is a lifesaver.
After 12 rough months, Hertz’s stock closed 18% higher after the Apple news broke.
Rental Cars and Self-Driving Car Companies: The Perfect Marriage
It’s too early to say whether the self-driving car industry will continue to use the resources of rental car companies.
But from a technology development perspective, such deals offer the perfect symbiosis.
They will allow technology companies to focus on building self-driving car technology without wasting money on entire vehicles.
For Apple, it was a no-brainer. The company’s self-driving car department, nicknamed “Project Titan” has had its own share of struggles in the last month. It was losing personnel left and right.
So when Apple CEO Tim Cook told Bloomberg that the company was “focusing on autonomous systems,” no one was surprised. Apple just had to solve the problem of testing its technology without cars. Now it has.
Let’s see if other companies in the self-driving car race — specifically those that don’t already produce cars — will follow suit.