Uber Technologies announced on Wednesday that it is partnering with Hertz to provide 50,000 Tesla automobiles as a rental option to its ride-hail drivers by 2023.
Uber drivers will be able to hire a Tesla through Hertz beginning Nov. 1 in Los Angeles, San Francisco, San Diego, and Washington, DC, with the service expanding to more locations later this year, according to a blog post by the ride-hailing business.
The Tesla rentals, which will mostly consist of Tesla's Model 3 car, will be accessible only to Uber drivers and will start at $334 per week, including insurance and maintenance. As the program grows in the coming year, Uber says the rental rate will drop to $299 per week or less.
Hertz announced on Monday that it would order 100,000 Tesla vehicles by the end of 2022, prompting Uber's announcement. Tesla's stock soared after news of the company's largest-ever order, pushing its market worth beyond $1 trillion.
The agreement announced on Wednesday is Uber's most significant step yet in growing the usage of electric vehicles on its platform. By 2030, the business plans to operate only electric vehicles on its platforms in the United States, Canada, and Europe, and globally by 2040.
However, only a small percentage of ride-hailing drivers can afford the higher EV sticker charges, and according to Uber data, only 0.15% of all Uber miles in the United States and Canada were traveled in electric vehicles in 2019.
Because they spend more than a third of their time driving around empty, ride-hailing drivers emit more pollution per passenger-mile driven. According to studies, electrifying one ride-hailing vehicle saves CO2 emissions by the same amount as converting three ordinary gas-powered vehicles.
Hertz, which is coming out of bankruptcy, expects that focusing on electric vehicles would help the once-dominant brand stand out among competitors.
Partnerships with ride-hailing businesses are also being considered by automakers as a simple way to introduce non-fuel-powered vehicles to a wider audience.
A request for comment from Tesla was not returned.