What Happens to
Car Rental in the
AV Economy?
Enterprise, Hertz, and Avis built billion-dollar businesses on a simple premise — people need a vehicle in places they cannot bring their own. Autonomous vehicles attack that premise directly. Here is what the data says about who survives, who pivots, and who does not.
The car rental industry has survived every previous disruption to the mobility market. It survived the rise of ride hailing — Uber and Lyft took urban trips but left the weekly rental, the road trip, and the airport counter largely intact. It survived the sharing economy — Turo created a new peer-to-peer segment without destroying the traditional operators. It even survived the pandemic, which temporarily devastated the sector before demand rebounded sharply in 2022 and 2023.
Autonomous vehicles are a different kind of threat. Not because they are newer or more dramatic — but because they attack the specific use cases that car rental has always depended on most directly and most profitably.
The airport counter exists because people need a vehicle in an unfamiliar city and cannot bring their own. When a Waymo or a Rivian R2 robotaxi can pick you up at arrivals, take you anywhere in the city at a predictable price, and drop you at departures on the way out — that premise dissolves.
The use cases that are genuinely at risk
Not every car rental use case is equally threatened. The first step in understanding the AV impact is separating the use cases that are structurally vulnerable from those that are not.
Airport city mobility — high risk
A business traveller arriving at LAX, SFO, or Miami International who needs to get to a hotel, attend meetings across the city, and return to the airport. This is the highest-value, highest-volume car rental use case — and it is precisely the scenario that Waymo, Uber, and the Rivian R2 fleet are targeting first. San Francisco, Los Angeles, and Miami are among the first cities in every AV deployment roadmap. The overlap is not coincidental.
Urban leisure trips — high risk
A tourist renting a car to explore a city, visit attractions, and navigate between locations. In any city with dense robotaxi coverage, the economic case for renting a car — paying the daily rate, insurance, fuel, and parking — weakens significantly against a robotaxi that costs less per mile and eliminates parking entirely. Parking alone can cost $30 to $50 per day in major cities.
Road trips and interstate travel — lower risk
A family driving from Phoenix to the Grand Canyon, or from Chicago to Michigan. Robotaxis operate within defined geofenced urban areas. Long-distance interstate travel, rural destinations, and multi-state road trips remain outside AV operational design domains for the foreseeable future. This use case stays with rental companies for at least the next decade.
Cargo and utility rentals — low risk
Moving vans, pickup trucks, cargo vehicles, specialist equipment. Robotaxis are passenger vehicles optimised for urban mobility. The practical vehicle rental market — someone who needs a truck to move furniture, a van for a catering business, a tow vehicle for a trailer — is structurally different and not threatened by AV passenger fleets.
The Hertz signal everyone should have read more carefully
In October 2021, Hertz announced it was purchasing 100,000 Tesla electric vehicles — the largest single EV fleet purchase in history at the time. The deal was celebrated as a bold modernisation move. Hertz's stock surged. The logic seemed sound: electrify the fleet, reduce fuel costs, attract younger environmentally-conscious renters.
By early 2024, Hertz had reversed course entirely. It sold the majority of its EV fleet, took a write-down of approximately $4.5 billion, and cited three structural problems: EVs had higher repair costs than anticipated, charging infrastructure at rental locations was inadequate, and customers were returning vehicles with damage claims at higher rates than with traditional petrol cars.
The failed EV bet revealed something important that goes beyond the specifics of electric vehicles. Owning and operating a large, depreciating vehicle fleet in a rapidly changing mobility landscape is becoming structurally more dangerous — not less. The companies that are winning in the AV era — Uber, Lyft, Waymo — are doing so by minimising asset ownership, not maximising it. Hertz's instinct to own the fleet was the instinct of the old model.
"Hertz didn't lose $4.5 billion because electric vehicles are bad. It lost $4.5 billion because owning a fleet in a disrupted market is a fundamentally different risk proposition than it was a decade ago."
ITquette Autonomous Lab analysis — April 2026Turo is the most interesting case
Of all the companies in the car rental and vehicle sharing space, Turo has the most defensible long-term position — and it is defensible for a reason that has nothing to do with technology and everything to do with business model architecture.
Turo does not own vehicles. It is a marketplace where private vehicle owners rent their cars to other people. That asset-light model means Turo does not carry fleet depreciation risk, does not need to manage charging infrastructure, and does not need to maintain physical locations at airports. Its cost structure is fundamentally different from Hertz or Enterprise.
More importantly, Turo's model is theoretically compatible with the AV transition rather than threatened by it. In a world where many households own autonomous vehicles that sit idle 22 hours per day, Turo becomes the marketplace through which those autonomous vehicles earn revenue when their owners do not need them. The vehicle goes out, earns money, returns. Turo collects the marketplace fee. This is not guaranteed — it requires regulatory frameworks that permit autonomous vehicles to operate without a licensed driver present, which does not yet exist in most markets — but the directional logic is sound.
The verdict by company
Traditional car rental operators share the same structural vulnerability — they own large depreciating vehicle fleets concentrated at airport locations. But their exposure differs meaningfully based on diversification, balance sheet strength, and whether they have begun pivoting toward the AV ecosystem.
Already financially weakened by the EV write-down. Heavily concentrated in airport locations. Fleet-heavy asset model. Limited technology platform. The company that is most exposed to AV disruption of the airport mobility use case — and the least positioned to pivot quickly. A Hertz partnership with an AV operator would be the rational move, but there is no evidence one is being actively pursued.
The largest car rental company in the world by fleet size. Enterprise's diversification — corporate accounts, insurance replacement vehicles, neighbourhood locations rather than just airports — gives it more resilience than Hertz. The insurance replacement market in particular is not threatened by AVs in the near term. But Enterprise's core business depends on individual mobility decisions that AVs will gradually erode in urban markets. It needs a pivot strategy and the balance sheet to execute one.
Has been more active than most in exploring AV partnerships — Avis has a fleet management agreement with Waymo to maintain and service its vehicles in several markets. That relationship is strategically interesting: rather than competing with AV operators, Avis is positioning as a fleet services partner. If that pivot deepens, Avis could transition from car rental company to AV fleet operator and maintenance provider — a meaningfully different business.
Companies focused on recreational vehicles, campervans, motorcycles, exotic cars, and specialist utility vehicles face almost no near-term AV threat. These are use cases that a Waymo or Rivian robotaxi cannot replicate. The risk is long-term market size shrinkage as urban mobility habits change — but the timeline is decades, not years.
The companies that service, clean, charge, repair, and manage AV fleets at scale will be in strong demand as autonomous vehicle deployments grow. The operational infrastructure, physical locations, and in some cases the workforce of existing rental companies could be repositioned to serve this function. Avis's Waymo partnership is the clearest current example of this pivot in practice.
A different model worth noting
Turo sits outside the traditional car rental peer group — it does not own vehicles, does not operate physical locations, and does not carry fleet depreciation risk. It is a peer-to-peer marketplace where private owners rent their vehicles to other people. That structural difference makes a direct comparison with Hertz or Enterprise misleading.
It is worth flagging because it illustrates what a more defensible model looks like in a disrupted market. Asset-light, marketplace-based, no fleet ownership risk. In a world where autonomous vehicles eventually sit idle for most of the day, a platform that connects idle vehicles with people who need them temporarily has a logical role to play. The regulatory frameworks for autonomous vehicles to operate without a licensed driver present do not yet exist in most markets — but directionally, the peer-to-peer marketplace model ages better into the AV economy than the fleet ownership model does.
The lesson for traditional car rental operators is not to become Turo — that ship has sailed. The lesson is that the asset-light principle Turo represents is the direction the market is rewarding. The operators that find ways to reduce their fleet ownership exposure while maintaining their location infrastructure and customer relationships will be better positioned than those that defend the existing model in full.
What the data does not yet tell us
There are three genuinely open questions that will determine how quickly and how severely the AV transition affects car rental — and the data does not yet give us clear answers.
- The price crossover point: Goldman Sachs projects robotaxi costs falling to approximately $1 per mile by 2030. A weekly car rental at current rates costs roughly $0.30 to $0.50 per mile when driven regularly. If the robotaxi price curve steepens faster than projected, the crossover may come later than 2030. If it steepens slower, car rental has more runway than the most bearish forecasts suggest.
- The geographic concentration of AV deployment: AV deployments are concentrating in a small number of US cities — San Francisco, Los Angeles, Phoenix, Austin, Miami. Car rental demand in secondary cities, rural markets, and international destinations where AV deployment is years away remains unaffected. The disruption will be geographically uneven in ways that aggregate market forecasts do not capture.
- The regulatory pace: Airport authorities control access to terminal pick-up and drop-off zones. The regulatory decisions about whether and when to grant AV operators access to airport curbs — and on what terms — will significantly shape how quickly the highest-value car rental use case is threatened. Some airports will move faster than others. Some will resist for longer than the technology warrants.
The car rental industry will not disappear. The companies that survive will be those that identify which parts of their current business are genuinely defensible and concentrate capital there — rather than defending every part of the model equally against a threat that is moving unevenly across geographies and use cases.
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