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Avis Budget Collaborates with Waymo for Self-Driving Cars

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Vehicle rental & leasing services provider, Avis Budget Group, Inc. (CAR - Free Report) , recently inked a definitive agreement with Waymo, an Alphabet Inc. GOOGL owned firm. Per the deal, the company will offer support and maintenance services for Waymo’s self-driving fleet to make them readily available for riders round the clock. The multi-year agreement for an undisclosed amount boosted investor confidence. As a result, Avis Budget’s shares rallied as much as 21% during intra-day trading, closing at $27.67,up 14.2%.

The collaboration aims to support Waymo’s growing autonomous vehicle fleet and is a testament to the fact that driverless vehicles are getting closer to being a common feature on public roads. Per the agreement, Avis Budget will provide various automotive services such as interior and exterior cleaning, oil changes, tire rotations, and the checking, ordering and installation of automotive parts, as well as other necessary fleet support and maintenance services.

Waymo intends to change the mobility landscape with the addition of hundreds of Chrysler Pacifica minivans, manufactured by Fiat Chrysler Automobiles N.V. FCAU, to build a 600-vehicle fleet. This self-driving car company is changing its operational gears by shifting from an in-house test program in Silicon Valley to a large-scale “early rider” program in Phoenix, AZ, that will eventually include hundreds of vehicles available for use by residents.

With an extensive network of rental facilities across the globe, Avis Budget is an ideal partner for Waymo to keep its fleet ready for ride through periodic maintenance when not in use. The strategic partnership will enable Avis Budget to leverage its current capabilities and assets to gain a first-hand in-depth knowhow of the technologies involved in self-driving cars that are likely to be the toast of the market in the near future. The partnership will be initially launched in Phoenix and is likely to gradually extend to other cities.

Avis Budget was the first in the vehicle rental industry to adapt to the technological era, wherein companies are exploring the online and mobile portals to enhance sales and margins. The company has also launched the mobile feature, “Avis Now,” which marks the transformation for its overall car-renting process. In addition, Avis Budget introduced a digital payment option with MasterPass. Avis Budget’s earlier achievements in this field include the launch of an Android application that enables customers to make, confirm or cancel bookings through voice commands. It also launched, Budget Brand’s revamped website for truck rental customers, along with its mobile app and adoption of the Google Wallet app, all in order to enhance customer experience. With such investments in technological advancements, Avis Budget aims to pull up its sagging shares that have underperformed the Zacks categorized Business – Services industry with a decline of 3.3% in the last three months as against a gain of 9.5% for the latter.

Avis Budget currently has a Zacks Rank #4 (Sell). A better-ranked stock in the industry is SPS Commerce, Inc. SPSC, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SPS Commerce has a long-term earnings growth expectation of 22.5%. It has beaten earnings estimates in each of the trailing four quarters with a positive surprise of 104.2%.

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