As many of you know, we’ve been engaged with Avis since 1998 in developing the rental fleet management application of our wireless technology. We’ve significantly evolved this technology into a leading edge system, earning two major patents along the way which provides unique vehicle management capabilities in both traditional airport lots and the new virtual lot environments where reservations, vehicle access and billings are executed remotely and automatically via smartphone.Our technology is the enabling force behind Avis Budget foray into the virtual rental world which Avis launched yesterday under the name Avis on Location. This allows Avis Budget to offer a de-centralized charge-by-the-hour car rental service to its customers without any on lot staff. The service can be deployed quickly wherever demand dictates with as few or as many vehicles as needed. Customers can then self-manage rentals through their smartphones for a more convenient, cost-effective, time-saving experience. Among the many advantages this technology gives Avis Budget over competitors like Zipcar is that you don’t need a subscription to access the service or a special card to access the vehicle. Everything is controlled through a smartphone accessible web interface, our wireless communications technology and our in vehicle intelligent devices which do everything from recording vehicle usage to unlocking and locking the car doors. By many accounts the vehicle car rental space is the fastest growing segment of the car rental industry. Auto Rental News has estimated that the market will exceed a billion dollars in the next decade. For Avis Budget virtual rentals are especially important for its dedicated corporate business. In fact Avis Budget has already deployed I.D. Systems technology in thousands of vehicles, on the corporate campuses of several of its Fortune 500 customers and the success of those implementations was a major driver behind the agreement we signed yesterday.
Our technology also brings significant value to Avis Budget’s traditional airport rental lots. Our system automates vehicle data collection without human intervention, streamlines billing and has demonstrated through tens of thousands of rental transactions, a substantial positive impact on Avis Budget’s fuel-related revenues.As reported in our joint press release yesterday afternoon, the agreement between I.D. Systems and Avis Budget includes the following financial and strategic highlights. I.D. Systems received the $14 million purchase order from Avis Budget to deploy our system on 25,000 Avis Budget rental vehicles primarily in the Northeast United States. The agreement also gives Avis Budget an option to expand system deployment across its global fleet. Avis Budget has a number of significant incentives to exercise this global deployment option as Ned will detail in a moment, including the $4.6 million equity investment in I.D. Systems, warrants to purchase additional shares of I.D. Systems' stock in the future and the prospect of extended, exclusive use of our technology. On the technical side of the transaction, our system is fully integrated with Avis Budget's existing rental management systems, including the Wizard Reservation System, which enables any and all vehicles equipped with our technology to be utilized in either virtual or traditional airport setting. This gives Avis Budget maximum flexibility in allocating vehicles to meet shifting market demand and it gives Avis Budget customers a seamless experience no matter where they pick up or drop off their vehicle. I.D. Systems will provide all system hardware, software, maintenance and support services for this program, while Avis Budget is hosting the system in its IT centre using I.D. Systems' software. Read the rest of this transcript for free on seekingalpha.com