Hertz launches car-sharing service for hourly rentals

NEW YORK — A cherry red Mini Cooper convertible enjoyed center stage at Hertz's launch Tuesday of a car-sharing service in New York, London and Paris — the most ambitious step yet into that market by a traditional car rental company.

Like existing car-sharing companies, Hertz will place cars in a variety of locations that members of the sharing program, called "Connect by Hertz," can reserve online. Rentals are charged hourly; the annual membership fee includes insurance, gas, roadside assistance, maintenance and use of a universal key card.

Hertz is entering the car-sharing market that was pioneered and still dominated by Zipcar which operates in Seattle and about a dozen other cities. Car-sharing has remained strong as the traditional car-rental industry faces a series of challenges: Airlines have reduced flights, consumers have cut leisure spending and business travel has dropped, all of which have cut sharply into rental revenue and profits.

Even so, Mark Frissora, the company's chairman and chief executive, said in an interview that the company's timing for launching Connect by Hertz could not be better. Starting small, Hertz hopes to capitalize on both consumer demand for alternatives to car ownership and the current weakness of its rivals.

Other traditional rental companies already have tiptoed into the car sharing market.

Privately owned Enterprise Rent-A-Car expanded its WeCar sharing program, officially launched in St. Louis early this year, to roughly half a dozen universities and businesses. And U-Haul International Inc., also privately held, started a car sharing program in Berkeley, Calif., Madison, Wis., and Portland, Ore., that it now plans to expand into Portland, Maine, and College Station, Texas.

Connect by Hertz is still dwarfed by other car sharing operations. In New York, Hertz is starting with 10 locations in Manhattan, while Zipcar has 300 locations in greater New York. Hertz will charge a $50 annual membership fee and hourly rates starting at $10, similar to Zipcar charges.