Hertz Global Holdings Inc (NYSE:HTZ) said it would expand services at its car sharing segment, Connect, in an attempt to capture the growing market, after rival Zipcar (NASDAQ:ZIP) made its highly successful Nasdaq debut last week.
The car sharing sector, which is still in its infancy, offers a lucrative investment prospect with rising fuel prices, expanding metropolitan population and falling parking space. The sector is considered to have a lot of market potential, both in the United States and internationally.
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Hertz, which had failed last year to win over Dollar Thrifty (NYSE:DTG) shareholders with its buyout offer, said it would expand pick-up locations to more than 100 under its one-way car sharing program.
The company also said it would eventually be able to rent one-way from New York City to other cities and college campuses.
Zipcar, founded nearly a decade ago, offers a service that allows customers to rent cars at an hourly or daily rate and often park in convenient reserved spots. Customers also pay annual membership fees.
Zipcar is popular in urban areas and around universities, where fewer people own cars and parking is scarce and expensive.
The other large car rental companies in the space are Enterprise Holdings Inc 1/8EPRIH.UL 3/8 and U-Haul, owned by Amerco (NASDAQ:UHAL).
Hertz shares rose 3 percent to $17.46 in morning trade on Wednesday on the New York Stock Exchange. The stock touched a more than three-year high in the session.
The Zipcar stock jumped 5 percent to $30.80 on Nasdaq.