2013-01-02

Co.Exist

What Happens To Zipcar Now That Avis Bought It For $500 Million?

And what does it mean for the future of the sharing economy?

It’s easy to complain about Zipcar if you use it on a regular basis. Prices have gradually risen over the past few years, vehicle supply on weekends has decreased, and on more than a few occasions I’ve stepped into a car to find out the last driver left behind trash and a mostly empty gas tank. But there’s no denying that Zipcar--founded in 2000--is a lifeline for urbanites who need quick vehicle access. In many large cities, you can’t walk more than a couple blocks without bumping into a row of Zipcars, which can all be unlocked with a simple online reservation and a membership card.

All of which is why it’s such a big deal that car rental company Avis purchased Zipcar on January 2nd for $12.25 per share in cash, or approximately $500 million. While some people are already writing Zipcar’s obituary, the acquisition might ultimately be a mixed blessing. Here’s what could happen.

An expanded fleet

One of the worst casualties of Zipcar’s growth is vehicle availability; if you want a car on weekends or holidays, you had better plan relatively far in advance. Avis could change that. As the New York Times explains, Avis’s existing fleet may soon be used to alleviate Zipcar’s availability issues.

Some Zipcar customers won’t be thrilled with the options. Zipcar’s fleet tends toward Mini Coopers, BMWs, and Honda hybrids, while Avis has some less exciting options (though it does also have its share of Mini Coopers and hybrids). But in a pinch, every available vehicle helps.

More international presence

Zipcar already has fleets in the U.S, Canada, and Europe, but Avis vehicles can be found worldwide, from Australia to Zimbabwe. Zipcar won’t expand everywhere immediately, but we’ll probably see it begin to creep into new locations, albeit using just Avis’s cars.

One-Way Rentals

Hertz on Demand, a carsharing service from Hertz that originally began under a different name in 2008, offers customers the option of renting vehicles for one-way rides. Want to go to the airport in a Hertz on Demand car? No problem. Just leave the vehicle there. Car2Go, a carsharing service from Daimler AG, also offers one-way trips. With a fleet bulked up by Avis’s vehicles, it probably won’t be long until Zipcar offers one-way rentals, at least to select locations like airports.

A culture change

Zipcar CEO Scott Griffith tried to reassure customers in an email announcing the acquisition that the company’s culture will remain the same. He wrote: "Some things won’t change at all--from the Zipcar team in your local office to the great brand, to our relentless enthusiasm for making the user experience the best it can be." But let’s be honest. Brands almost always bow to their new bosses in some form after an acquisition. For a recent example, look at Instagram, which rankled users with an updated terms of service allowing the service to sell users’ pictures--a move most likely prompted by new boss Facebook. This shouldn’t have been surprising; Facebook is known for upsetting users with its privacy policies.

Those culture changes could be serious for Zipcar, which is generally liked far more than its car rental counterparts. Felix Salmon speculates: "All of the big rental companies have made some kind of half-hearted attempt to get into the hourly rentals business, and none of them have gotten much traction; now that Zipcar is part of a much larger parent, it could well suffer the fate of those previous attempts to build rather than buy."

If Zipcar can retain its culture, the Avis acquisition could be a boon to customers. If it gets sucked into the much-hated car rental machine, another service--perhaps a peer-to-peer carsharing company, even--will step in to take its place.

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1 Comments

  • Babebi

    Zipcar has always provided an amazing user experience: booking a car, extending a booking while stuck in traffic, dropping a car, etc. have always taken seconds so I hope Avis will learn from Zipcar big time. I don't see peer-to-peer car-sharing as a replacement but as a complement. Transportation options are simply too scarce at the moment and we need all of them.