The city of Hamburg is being fitted out for a new kind of car rental scheme powered by telematics, the technology behind black box car insurance.

Hire firm Europcar is teaming up with the German manufacturer Daimler on Car2go, a highly flexible rental service which does away with the need for specialist hire centres and circular routes.

Instead, Car2go’s fleet of Smart Fourtwo vehicles can be picked up from one of the city’s many specially-dedicated parking spaces and dropped off in almost any public parking bay, without the need to pay and display.

Telematics monitors the use of each car and bills the customer at a rate of 29 euro cents per minute – a price that includes fuel, taxes, rental car insurance and all parking charges.

And regular valet and refuelling services between customers mean that the Car2go is both clean and full of petrol at the start of each new journey.

The planned Spring 2010 launch of Car2go in Hamburg follows successful trials in Ulm, Germany and Austin, Texas.

It signals yet another application for the vehicle integrated telecommunications technology – telematics – currently used in manufacturer’s performance monitoring tools, parental observing devices, LoJack and black box car insurance, among others.