2011-07-21

Co.Exist

Hertz Guns For Zipcar's Business With Lower Fees And More EVs

The rental car agencies new car sharing business hits Zipcar where it hurts: cheaper prices and electric cars.

Hertz has offered a Zipcar-like carsharing service for years, but you probably didn't notice—the service charged an annual fee, came with many of the hidden cost associated with standard car rentals, and was only available in limited locations. But the company has apparently realized that car sharing can be lucrative when done right, so this week Hertz nixed the old program and replaced it with Hertz on Demand, a carsharing service on steroids.

The new Hertz on Demand offers an array of perks that its major competitor can't touch. Among them: no enrollment or annual membership fees, cheap hourly rates (starting at $5), GPS in every vehicle, in-car customer service communication, a $250 insurance deductible, one-way trips to the airport (and other select locations), luxury cars like the Cadillac Escalade Hybrid, and electric vehicles like the Chevy Volt and Nissan Leaf.

Is Hertz on Demand going to be the service that trumps Zipcar? Maybe. Hertz certainly isn't shy about its ambitions to steal the car sharing giant's business—Hertz's press release for the new service explicity compares Hertz on Demand to Zipcar, and Zipcar is still hemorrhaging money despite its recent IPO.  But Hertz on Demand is still only available in a handful of U.S. cities, including New York City, San Francisco, Washington, DC, and Boston. The service will also have to get over the psychological hurdle of mistrust from consumers who have been wronged by the car rental industry's sneaky fees.

For anyone living in one of Hertz on Demand's pilot cities, the service does seem to be worth trying. The added novelty of having electric cars on tap for customers to experiment with may just give Hertz the edge—for now. If Hertz On Demand really does take off, Zipcar may have to rethink its strategy.

 

[Top image: Cadillac]

Reach Ariel Schwartz via Twitter or email.

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