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Lyft partners with rental group Sixt to target carless city dwellers

(Reuters) - Lyft Inc said on Thursday it has partnered with the U.S. unit of German rental car group Sixt SE to expand its in-app rental business to carless city dwellers eager to take a trip.

The stock price of Lyft Inc. is seen on a display after the company's IPO at the Nasdaq Market Site in New York City, New York, U.S., March 29, 2019. REUTERS/Mike Segar

Lyft users can book a designated car through the ride-hailing app, add insurance and extras and directly pick up the car from the rental lot without waiting at the counter.

Lyft already runs a limited rental car program in Los Angeles and the San Francisco Bay Area without the involvement of any car rental companies.

The new partnership allows it to quickly scale while avoiding the costs and regulations associated with owning and operating a national fleet.

“COVID has caused a change in behavior and people need different transportation options,” Cal Lankton, Lyft’s vice president of Fleet & Global Operations, said in an interview.

While rental car demand has plummeted across the country as a result of the pandemic and driven several companies, including Hertz Global Holdings Inc, into bankruptcy, demand in large cities with lower car ownership rates has boomed.

In New York City, many rental locations have run out of cars and prices skyrocketed as residents seek to escape on extended trips.

Lankton said bookings for Lyft’s LA and San Francisco rental fleets are higher than prior to the pandemic.

Sixt, for its part, is hoping the Lyft partnership will elevate its profile in the United States, where it primarily rents premium vehicles. One of the largest rental companies in Europe, the company has only 85 U.S. locations, 30 of them at airports.

“We have excellent customer ratings, but almost no one knows us here,” said Sebastian Birkel, president of SIXT United States. “So we have to grow as fast as we can.”

Birkel said Sixt was expanding downtown locations, but also believed business airport travel would return in the future.

(Lyft corrects number of Sixt U.S. airport locations to reflect they are 30 out of 85, not the majority in paragraph nine)

Reporting by Tina Bellon in New York; Editing by Matthew Lewis