Tag Archives: zipcar

Can car-sharing spread to older Americans?

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The Christian Science Monitor asks whether the phenomenon of car-sharing will spread beyond young adults:

But there are limits to the model. Car sharing caters to a fairly limited demographic – namely, educated, Web-savvy urban dwellers in their 20s and early 30s with access to decent public transportation. “It’s narrow in terms of the overall driving potential,” Mr. Belzowski says.

Car sharing works well in a compact city with decent public transit like Boston or New York, but Belzowski points out that more sprawling US metro areas present a problem. “Many cities are designed for having a vehicle, and it’s difficult to move around those cities in a timely way unless you own a vehicle.”

Another obvious drawback: Car owners share with strangers at their own risk. “I had an issue with there being a lot of dog hair in one, and I found a dog toy in the back,” Hill says.

Even in car-share hot spots, having a car at your beck and call is not guaranteed. The number of available cars is still limited to the point that getting one during peak times, like weekends, requires advance planning. That could be helped as car sharing goes more mainstream – national rental car company Avis recently agreed to buy Zipcar for $500 million, a merger that should expand the company’s vehicle fleet. Other major rental car companies, including Enterprise and Hertz, are getting into the car-sharing game as well.

I’m not sure this article gives us much insights into what might prompt older adults to adopt car-sharing. Reading between the lines, here are a few hints from the article:

1. Older adults are more likely to live in suburbs while younger adults desire to live in the city.

2. Older adults are less willing to share cars with others.

3. Older adults would rather have cars available when they want them rather then having to more meticulously plan their driving schedules.

The first hint seems relevant: this would appeal most to people living in denser cities where owning a car is much more difficult. However, these second two reasons seem more flimsy and seem based on the idea that older adults simply aren’t used to the idea of car sharing. Reasons #2 and 3 could be related to having children.

One solution to the demographics is to simply wait for these younger adults to grow up and they will be already used to car-sharing. But, I suspect Zipcar and others would like to grow this category at a faster pace.

h/t Instapundit

“Peer to peer” car sharing ramps up

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I’ve talked before about how car sharing service Zipcar has freed my wife and me from needing to own a car.  Unfortunately, similar non-ownership options aren’t available to most Americans for the simple reason that Zipcar’s fleet is mostly concentrated in urban centers and around college campuses.  For many suburbanites, the prospect of an inexpensive, on-demand, by-the-hour car rental hasn’t been an actual prospect.

With RelayRides rolling out nationwide this week, however, that may be changing:

Companies like RelayRides…offer a different take on carsharing than the one established by Zipcar and its competitors. While those companies own fleets of cars, RelayRides is entirely peer-to-peer — if you have a car, then you can make it available for rental when you’re not using it. RelayRides says the average car owner makes $250 a month from the program.

Since it takes advantage of the cars already on the road, founder and chief community officer Shelby Clark argues that peer-to-peer carsharing can have a big impact — after all, a fleet-based company couldn’t simply declare one day that it’s launching nationally.

This is potentially very disruptive of Zipcar’s business model.  RelayRides (and other challengers like Getaround) don’t have to go head-to-head with Zipcar in many parts of the country because those markets are utterly unserved.  And even where RelayRides has to go head-to-head with Zipcar, their prices seem comparable.  So long as the reservation process and pickup hassle is roughly the same, I know I would have no problem booking cars through RelayRides.  My purchases within an active market for by-the-hour car rentals would simply be driven by normal consumer considerations like price, convenience, customer service, etc.

Indeed, this is the beauty of the free market, as Leigh Beadon over at Techdirt reminds us:

Nobody is immune—not even the last disruptor. Companies like Zipcar changed the game with their car-sharing services, but they are already facing new challengers….How big and how successful [RelayRides’] approach will become remains to be seen, but it’s a creative idea that makes a clear point: disruption can happen anywhere, to anyone. As the entertainment industry continues to fight progress, experts from every side of the debate love to make profound-sounding statements about how the internet has changed our media consumption habits, but that’s old news. From mobile-based taxi & limo services to the coming era of 3D printers and things like the Pirate Bay’s Physibles site, digital technologies are disrupting a lot of things, not just media.

The current state of Zipcar

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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?