Uber Technologies Inc said on Wednesday it is launching a new partnership with car rental company Hertz to offer 50,000 Tesla Inc vehicles as a rental option to its ride-hail drivers by 2023.
Uber drivers can rent a Tesla through Hertz starting November 1 in Los Angeles, San Francisco, San Diego, and Washington, D.C., and the program will expand later this year to cities across the country, the ride-hail company said in a blog post.
The Tesla rentals, which primarily consist of the electric car company's Model 3 sedan, will be available exclusively to Uber drivers and will start at $334 per week, including insurance and maintenance. Uber said the cost of rent will drop to $299 per week or less as the program expands next year.
Uber's announcement comes just days after Hertz announced on Monday that it will order 100,000 Tesla vehicles by the end of 2022. News of Tesla's largest order sparked a surge in stock prices and the company's market capitalization surpassed $1 trillion.
Wednesday's deal marks the most important step Uber has taken so far to expand the use of electric vehicles on its platform. The company has committed to operating electric vehicles only on its US, Canadian and European platform by 2030, and worldwide by 2040.
Company data showed that only a few cold drivers could afford the highest prices for electric car badges, and in 2019, only 0.15% of all Uber miles in the US and Canada were driven on electric vehicles.
Ride-hail drivers produce more pollution per passenger mile they travel because they spend more than a third of their time driving empty. Researchers generally assume that electrifying a single hail car reduces the same amount of carbon dioxide as converting three regular gas-powered vehicles.
Hertz, which is emerged from bankruptcy, hopes that its electric vehicle approach will allow the once-dominant brand to stand out against competitors.
Carmakers also consider partnerships with ride-hail companies as a convenient way to expose more consumers to non-fuel-powered vehicles.
Tesla did not respond to a request for comment.