Zipcar was the rental car market disruptor that delivered hourly, neighborhood rental wheels to a largely urban, largely younger market in a way that Hertz, Enterprise, Budget and Avis weren’t serving. The big three focused on leisure and business rentals, while Zipcar gobbled up the need for wheels-on-demand and delivered what 760,000 members—called Zipsters, want.
When it was clear that Zipcar was on to something, Hertz an Enterprise jumped on the hourly-rental bandwagon with their own services—albeit not as cool or convenient as Zipcar. And now, Avis Budget Group has jumped into the pool as well—by buying Zipcar.
The corporate behemouth has announced that it is buying Zipcar for $500 million in cash.
“We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company,” Ronald L. Nelson, Avis’s chief executive, said in a statement.
And a darn good way to compete with their rivals.
Let’s hope Avis Budget leaves good enough alone, and allows the Zipcar model to flourish with an influx of cash, rather than become just another operational way to rent a car.
Part of Zipcar’s allure to that younger, urban market, was the ability to rent Gen Y popular cars like the Mini Cooper and hybrid vehicles at a low cost, and to be seeded deep into urban neighborhood pockets, near college campuses, at local gas stations and pay lots. Not to mention the cool technology that meant never having to be “processed” by a customer service rep who knew little and cared even less about your needs. Zipcar was the anti-rental car company—just pick-up and go.
Let’s hope they stay that way as the company merges Zipcar into the Avis fleet, and moves the company to corporate headquarters in Boston. Otherwise, Zipsters will find the next big innovator, and travel elsewhere.
Source: NY Times Dealbook