{"id":2625,"date":"2013-01-07T22:39:56","date_gmt":"2013-01-08T03:39:56","guid":{"rendered":"http:\/\/www.alexblock.net\/?p=2625"},"modified":"2013-01-07T22:39:56","modified_gmt":"2013-01-08T03:39:56","slug":"avis-zipcar-and-the-spectrum-of-car-sharing-services","status":"publish","type":"post","link":"https:\/\/www.alexblock.net\/blog\/2013\/01\/07\/avis-zipcar-and-the-spectrum-of-car-sharing-services\/","title":{"rendered":"Avis, Zipcar, and the spectrum of car-sharing services"},"content":{"rendered":"
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Old Avis ad in Australia - CC image from Bidgee<\/p><\/div>\n

Last week’s big transportation news: Avis purchased Zipcar for a cool $500 million<\/a>. \u00a0Reaction to the sale is all over the map, with some analysts praising the move<\/a> and some hating it<\/a>.<\/p>\n

On the ‘pro’ side of the ledger – Felix Salmon<\/a>:<\/p>\n

The acquisition solves a number of problems with the Zipcar model. For one thing, it gives Zipcar easy access to the one thing it needs more than anything else: money. The car-rental business is at heart a financing business: you need to be able to finance the acquisition of new cars, efficiently dispose of them once they get too old and too used, and generally make profits by juggling enormous cashflows both coming in and going out. When you\u2019re a small and risky company like Zipcar, that kind of fleet and cash management is much harder than when you\u2019re a giant like Avis Budget.<\/p>\n

The other big problem that Zipcar had was that it couldn\u2019t meet demand at weekends: the company\u2019s slogan is \u201cwheels when you want them\u201d, but in practice the cars tended to be sold out at precisely the times that members really wanted them. By merging with Avis, Zipcar gets to offer its members Avis cars when dedicated Zipcars are unavailable<\/p><\/blockquote>\n

On the ‘con’ side, pretty much anyone who hates the standard car-renting process – Sarah Lacy<\/a>:<\/p>\n

That\u2019s how much I loathe Avis. As far as I\u2019m concerned they only \u201ctry harder\u201d to piss me off. And thanks to a tightly controlled oligopoly, the rest of the rental car world isn\u2019t much better. There\u2019s little innovation or even need to innovate, when a few players control the entire market.<\/p><\/blockquote>\n

People hate renting cars – myself included. \u00a0The process stinks all around. \u00a0Pricing is anything but transparent or simple; even with a reservation you must wait in line; employees are constantly pushing insurance packages of dubious value; you constantly feel like you’re about to get nickel and dimed for a small scratch or a gas tank that’s not quite full – the entire process feels kinda sleazy.<\/p>\n

With that in mind, it’s easy to understand the angst of some users (see the concerns voiced in Ben Kabak’s post<\/a>). \u00a0From the ‘man on the street’ in this Dealbook summary of the sale<\/a>:\u00a0\u201cPlease don\u2019t let them screw it up.\u201d<\/p>\n

So far, Zipcar is looking to reassure folks they won’t lose that innovative spirit<\/a>, with the CEO expecting Zipcar to remain a standalone subsidiary, also while announcing plans to offer memberships to the service without the annual fee.<\/p>\n

For me, however, Zipcar use is way down. \u00a0My personal membership expired several years ago. \u00a0I maintain an account so I can be a member of my employer’s business membership (and will use that service for business trips that require a car), but my personal use is almost non-existent. \u00a0Conversely, I’ve been using Car2go<\/a>‘s point-to-point carsharing<\/a> far more frequently in DC (and I’m not the only one<\/a>).<\/p>\n

Car2go’s service isn’t an exact analogue for Zipcar, however. \u00a0If you think of carsharing services as a spectrum, between traditional car rentals on one hand (longer terms, frequently used during travel) and short trips within the city on the other (as Car2go’s trips have more in common with taxi rides<\/a> for DC users than car rentals), there is room for a whole host of products and services, each tailored for a different segment of the travel market.<\/p>\n

The spectrum of car-based transport would look something like this:<\/p>\n