(Bloomberg) -- Hertz Global Holdings Inc. reached agreements withUber Technologies Inc. and Lyft Inc., the two largest U.S.ride-hailing startups, to supply drivers with vehicles therental-car company rotates out of its fleet.

The partnerships, announced in statements Thursday, may mark areversal for Hertz, which said in January that ride-sharingservices were crimping growth. Uber and Lyft have been seen as athreat to auto-rental companies as travelers opt for an on-demandride as opposed to driving a rented vehicle.

“Largely, Uber is a technology company, so if you think aboutwho can provide fleet management services I think the list israther short” and includes Hertz as well as Avis Budget GroupInc. and Enterprise Holdings Inc., said John Healy, aNorthcoast Research analyst. Hertz is “already on the fringes ofthis business,” he said, adding that it could be a big market forthe company, which he rates a buy.

Hertz rotates about 200,000 cars each year

The vehicles Hertz will supply to Uber and Lyft are well-maintainedand in good condition, Chief Executive Officer John Taguesaid. Hertz rotates about 200,000 cars out of its fleet each yearin the U.S., said Hertz spokesman Bill Masterson.

“We consider this agreement to be largely complementary to ourcar-rental business, and it enables us to leverage our fleet anddistribution infrastructure to participate in the dramatic growthin the ride sharing, or e–hailing, segment,” Tague said in astatement.

Hertz rose 1.3% to $10.91 at 11:09 a.m. New York time afterclimbing as much as 11% in premarket trading.

Uber, recently valued at almost $68 billion, and the smallerLyft, last valued at $5.5 billion, have been competing for businesswith driver promotions and subsidized fares. While Lyft operatesonly in the U.S., it has teamed up with China’s Didi Chuxing andother global ride-hailing companies to form alliances to take onUber, which pledged to spend at least $1 billion a year tochallenge Didi in China. Demand for ride-hailing remains high inthe U.S., with Lyft posting a record month for rides in May.

Adding markets

The Hertz-Lyft deal builds on pilot programs with drivers in LasVegas and Denver, expanding to Los Angeles and San Franciscowith more markets expected to follow, the rental-car companysaid. Participating Uber drivers will start in the Los Angelesarea.

Hertz will provide set rates for drivers, whose vehicles will beserviced from dedicated off-airport locations, according to astatement. Drivers can use the vehicles for personal driving inaddition to business purposes, the Estero, Florida-basedrental company said.

Related: Drivers for Uber, Lyft operate their cars moresafely, report says

The announcements come amid a flurry of partnerships betweenautomakers and ride-sharing services as demand grows forquick-access vehicles. General Motors Co. took a stake in Lyft andthey have said they aim to develop a fleet of self-driving taxis.Fiat Chrysler Automobiles NV, which is supplying minivans to Google’s self-driving car program,has started discussions with Uber on a potential partnership ondriverless cars, people familiar with the matter said earlier thismonth.

“It’s a huge unknown how big this business can be,” said Healy,the Northcoast analyst. ‘It’s a huge unknown how the relationshipwith Uber and Lyft and Hertz and potentially other rental-carcompanies and other ride-hailing companies will evolve. I think itsignifies that these companies aren’t staying stagnant and going toallow themselves to go the way of a buggy whip."

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