Investing.com — The rise of robotaxis presents both challenges and opportunities for rental car companies, according to Bank of America analysts.
While autonomous vehicles could take market share from traditional rentals, BofA sees this impact as limited in the near term.
“Robotaxis pose a risk to rental car companies in that they could take share,” BofA noted, but added that “until robotaxis saturate the market and wait times become minimal, we think customers will prefer the convenience of a rental car.”
The bank explains that for many travelers, scenarios such as extended trips, off-the-grid destinations, or needing consistent access to a vehicle make rental cars a more practical option than relying on robotaxis or rideshare services.
BofA also highlighted potential opportunities for rental car companies to integrate with the emerging robotaxi market.
They could “help the robotaxi companies operate their fleets” or even “own their own fleet of robotaxis,” the bank suggested.
They believe the evolution could allow rental car firms to carve out a role in the mobility economy as it shifts toward autonomous transportation.
Meanwhile, traditional rental car companies like Hertz and Avis are said to be facing near-term pressures. BofA explains that both are navigating a fleet refresh process, with Hertz in particular likely needing an additional $500 million in capital in 2025.
Market share losses for both companies are also expected as a competitor reallocates more vehicles to on-airport locations.
BofA remains cautious on Hertz, maintaining an Underperform rating, but is more optimistic about Avis, rating it a Buy due to its stronger pricing trends and better-positioned fleet.
