The current state of Zipcar

The Infrastructurist provides a quick overview of the current state of Zipcar. Some of the things you should know:

Zipcar went public last week, and how. On its first day of trading, the company raised $174.3 million and finished up 56 percent. All told, Zipcar sold 9.7 million shares of stock at $18 a pop and earned itself a market value of $1.21 billion, according to Bloomberg…

The 11-year-old company currently operates in 14 cities — 12 in the United States, plus Vancouver and London — and 230 college campuses. Its fleet stands at around 8,000 cars, and its membership at 560,000.

Robin Chase, the company’s founder, has been known to say: “Infrastructure is destiny.” The business world is more concerned with whether profits are destiny. So far, for Zipcar, they have not been. Last year the company generated about $186 million in revenue but still posted a net loss of roughly $14 million…

Zipcar’s biggest problem, writes the Wall Street Journal, may be growing competition from traditional car rental companies…

In the end Zipcar’s success may hinge on how transportation evolves in the near future.

This overview is pitched as a look at whether Zipcar is “a good investment.” This would be the business angle: the company has not turned a profit even as it seems like investors are at least somewhat confident that they could make some money down the road.

But there are plenty of other questions to ask (the answers to these questions would have an impact on the business side but are more interesting to me): is this company on to something regarding infrastructure and the use of cars? In recent months, there is some data to suggest Americans want to live in more walkable environments (which could presumably lead to less interest in owning a vehicle). Is this model sustainable even in these cities, let alone less dense cities? It would be interesting to see Zipcar usage data regarding less urban college settings (like the Zipcars at North Central College in Naperville, Illinois – currently, there is a Toyota Matrix and Toyota Prius available on campus) compared to the big cities. Ultimately, is a car-sharing model the end goal or a middle step between gasoline powered vehicles and vehicles of the future that will be powered by something cleaner and cheaper?

0 thoughts on “The current state of Zipcar

  1. I’ve been an IGo (think non-for-profit Zip Car) member for a number of years now, and rarely use it.

    Recently I’ve stopped altogether.

    I could pay $10 bucks an hour at IGO (or Zipcar), or I could take advantage of deals like this (which are relatively easy to find) and pay $10 a day:

    http://www.enterprise.com/car_rental/deeplinkmap.do?bid=028&refId=MSMOPFY1

    It’s less expensive and offers more flexibility. Getting the car back in time for the next user can be stressful when there’s traffic and errands run longer than you expected.

    From where I stand, as a young car-less urban professional (target demographic), it’s very hard to see Zip Car as a good investment, especially if they aren’t even currently turning a profit.

    Like

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