Here's Why Uber Hurts Rent-A-Cars' Ability To Hike Prices

The growing popularity of car sharing services like Uber and Lyft among business users has hurt the ability of traditional car rental services to raise prices, an analyst said Thursday.

Morgan Stanley's Adam Jonas said car rental companies' share of expensed business trips has fallen to 36 percent currently from 39 percent a year ago.

Both Hertz Global Holdings, Inc. HTZ and Avis Budget Group Inc. CAR are each off about 17 percent year-to-date, changing hands recently at $20.64 and $55, respectively.

Whether car rental transactions are actually suffering at the hands of car sharing services is unclear. "The pie may have simply expanded," Jonas said.

But Jonas said he's cautious on the traditional car rental model and believes that given "the tech disruption," rental companies acting to raise prices is not part of "a sustainable bull case."

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Car rental companies "must be aware of the changing competitive landscape from discussions with their commercial clients," Jonas said.

The "first salvo," in Jonas' view may start with corporate contracts by large firms "who can offer a widening array" of transportation alternatives to employees, according to Jonas.

Jonas cited a study by online travel and expense-management firm called Certify, which included data on Uber's increasing market share versus taxi, limousine and airport shuttle services.

The traditional services saw their market share in eight major U.S. cities fall to an average of 52 percent during the past year, from 89 percent a year earlier, according to the study.

Uber was the clear winner, with its market share growing to 47 percent recently according to the study, from 14 percent a year earlier.