In some respects, Alphabet Inc.'s (GOOGL - Get Report) deal with rental car giant Avis Budget Group Inc. (CAR - Get Report) to have Avis manage some self-driving test cars developed by Alphabet's Waymo unit and Fiat Chrysler Automobile NV feels a little overblown. The deal only covers test cars deployed in one metro area (Phoenix, Ariz.), and isn't exclusive. And of course, there's still no firm date on when cars equipped with Waymo's self-driving systems will see a commercial launch.

Apple Inc.'s (AAPL - Get Report) deal with Avis rival Hertz Global Holdings Inc.  (HTZ - Get Report) feels tinier still. Apple, which has reportedly been testing a half-dozen self-driving cars around the San Francisco Bay Area, is just leasing a small number of Lexus RX450h SUVs from Hertz, with the idea of retrofitting them with self-driving test systems.

Both deals, however, shine a light on how Google and Apple seem to be limiting their autonomous driving work to developing the hardware and software that allow a car to drive itself, and perhaps the software and services that consumers seated within such a vehicle would use. The strategy represents quite the contrast with what Tesla Inc.  (TSLA - Get Report) is trying to pull off.

According to Bloomberg, Waymo will pay Avis to "service and store" the self-driving Chrysler Pacifica test minivans it has built with Fiat. Avis will revamp certain Phoenix facilities to accommodate the minivans, and be responsible for "cleaning, oil changes, tire rotations and other vehicle services." Waymo naturally will be responsible for taking care of the self-driving systems.

Over the long run, the partnership might just extend to Avis buying and renting out cars equipped with Waymo systems. Waymo chief John Krafcik says Avis' ownership of on-demand rental service Zipcar was part of its appeal.

Avis and Hertz investors are certainly betting that such buy-and-rent deals, whether involving self-driving systems supplied by Waymo, Apple or some third party, will be common in the future. Avis shares rose 14.2% on Monday, June 26, to $27.67, and Hertz shares rose 13.6% to $10.83.

A good case can be made that such moves amount to irrational exuberance: There's a big difference between cars that can take over from human drivers in certain conditions, as Tesla cars supporting the company's Autopilot 2.0 system can, and ones that can fully replace drivers and be marketed by rental agencies as such. It's also remains to be seen how the first fully autonomous cars will cost to purchase and insure, and what rules regulators will place on how such cars are sold, rented and marketed.

Tesla's Elon Musk.
Tesla's Elon Musk.

On the flip side, Avis and Hertz respectively sport market caps of just $2.46 billion and $799 million even after Monday's gains. Thus, investors are simply betting that self-driving cars will add $300 million to Avis' long-term value, and $92 million to Hertz's. Crazier things have happened.

Either way, Waymo's deal with Avis is the latest in a string of partnerships made by the Alphabet unit. Its deal with Fiat Chrysler, struck in 2016 and expanded in April, now calls for 600 retrofitted minivans to be created -- many of them will be in the Phoenix area in the future. The company also partnered with No. 2 U.S. ride-sharing firm Lyft in May, a deal that could one day pave the way for Lyft to run autonomous ride-sharing fleets featuring Waymo-powered cars. And it has reportedly held talks with Honda Motor Co. (HMC - Get Report) and Ford Motor Co. (F - Get Report) about alliances.

All of these moves fit with remarks from Krafcik suggesting that Waymo, whose test cars have racked up over 3 million miles on public roads, is comfortable letting third parties handle much of the ecosystem surrounding its self-driving hardware and software. "We can imagine this [technology] in ridesharing, in transportation, trucking, logistics even personal use vehicles and licensing with automakers, public transport and solving the last mile," he said last year.

Apple now seems to be thinking along similar lines. Though its car project, codenamed Titan, initially planned to bring a fully-fledged electric car to market, reports over the past 12 months have signaled that it's focusing for now on autonomous driving systems, and perhaps an in-car operating system. Two weeks ago, Tim Cook confirmed Apple is "focusing on [developing] autonomous systems" for cars, and called the effort "the mother of all AI projects."

Tesla, by contrast, wants to control the autonomous driving user experience from start to finish. Its Autopilot systems go into Tesla cars, which in turn run on Tesla software, are sold at Tesla retail stores, and are serviced at Tesla service centers. And last year, Elon Musk signaled that Tesla could one day run an autonomous ride-sharing fleet that Tesla owners could loan their vehicles to when they don't need them.

Tesla's approach to autonomous driving has a lot in common with Apple's approach to the smartphone, tablet and PC markets. Whereas Google and (ironically) Apple's strategies have more in common with Google and Microsoft's.

As anyone paying attention to Apple's bottom line and customer loyalty rates can vouch, there's a lot of value to taking an end-to-end approach in terms of compelling new products to market quickly, creating a seamless user experience and deriving a ton of long-term financial value from loyal customers. And as anyone looking at Android's manic growth and Google's successful efforts to monetize it can vouch, an open platform that effectively addresses a big new market's needs can become a monster as its ecosystem swells, even if the early going is messy.

Ultimately, Tesla may end up being the iOS or macOS of autonomous driving, while Waymo and one or more other companies will be its Android or Windows. In the short-term, Tesla, whose Autopilot 2.0 systems are capable of some pretty impressive feats even if they can't yet do full autonomy, arguably has an edge. Over the long run, things might be much more competitive.

This column originally appeared on Real Money, our premium site for active traders. Click here to get great columns like this from Jim Cramer and other writers even earlier in the trading day.

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