J.M.
If you are going to be staying within SF proper, renting a car makes NO sense at all because of the cost and scarcity of parking. Between the MUNI system (subway/streetcars/buses), and BART, you can get nearly everywhere you want to go. However, if you are going to be leaving the City and going exploring in the larger area, a car might make sense for you guys.
MUNI will still be running at midnight, so I wouldn't worry about that at all.
However there may be times when you want the option of using a cab. You might want to ask the concierge at your hotel if they have carseats you can rent/borrow, or what they recommend?
Have fun on your trip!