Following Zipcar’s Cincinnati expansion, car-sharing company acquired by Avis

Just 49 days after Zipcar announced that it would expand its services in Cincinnati, the car-sharing company announced that it had struck a deal to be purchased for $491.2 million by Avis.

The move by Avis, into the car-sharing sector, follows those of Enterprise and Hertz, and is seen as a critical evolutionary step for the traditional car rental company.

As the nation’s largest car-sharing company with more than 760,000 members, Zipcar offers its customers a way to move about urban environments without needing to own a car. Their slogan – “Wheels when you need them” – has increasingly hit home with young people that have been migrating back towards urban centers and ditching their cars.


A Zipcar on 12th Street in between Vine and Race Streets. Photograph by Randy Simes for UrbanCincy.

According to the U.S. Department of Transportation (DOT), overall vehicle-miles traveled (VMT) have reached their lowest levels since 2003, and that per capita VMT to levels not seen since 1998.

Furthermore, the University of Michigan Transportation Research Institute has found that teenagers are delaying the pursuit of getting their driver’s license with just 31 percent of 16-year-olds getting their driver’s license in 2008.

“By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs,” said Ronald L. Nelson, Avis Budget Group chairman and chief executive officer. “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.”

While car-sharing continues to see explosive growth locally and nationally, now estimated to be a $400 million industry, it is yet to be seen what the merger will mean to car-sharing customers wary of getting behind the wheel of a “traditional” car rental company.

Wrote Adam Richardson in the Harvard Business Review, “Any time an incumbent acquires a disruptor there are challenges, and in this case, they stem from the very core of Zipcar’s existence: how it has created a sense of community with its customers and how it has used technology to create a scalable user experience that its customers love.”

Naturally, Zipcar leadership expects bright days ahead with more cars at more locations, new service offerings, and similar levels of service.

“This is a major win for Zipsters around the world,” Zipcar management wrote in an e-mail distributed to its customers. “With the global footprint, backing, and talented leadership of Avis, we’re going to step on the gas.”

Car-sharing has been available in Cincinnati since 2011. Rates start at $8.50 per hour, and 11 cars are available at five different locations in the Central Business District, Over-the-Rhine, Clifton Heights and Corryville.

Zipcar expands Cincinnati offerings to Downtown, Over-the-Rhine

Yesterday, Mayor Mark Mallory (D) announced that Zipcar was expanding its car sharing service in Cincinnati to the Central Business District and Over-the-Rhine.

“Partnering with Zipcar here in Cincinnati is an excellent opportunity to reduce congestion and parking demand, save people money, and provide access for people who would otherwise not be able to go about their day-to-day activities,” Mayor Mark Mallory said.

Until recently, Zipcar had only been available in big cities with more comprehensive mass transportation options; however Zipcar began testing its service with University of Cincinnati students and faculty last year. The initial service has blossomed into the full service being announced today.  Three “pods” of two cars each will be located in both neighborhoods as well as the two University of Cincinnati locations.

Driving a Zipcar requires a membership which can be obtained through their website. From there, members reserve a car for a certain amount of time and use it during the day. Members then use a key card or their smartphones to gain access to the designated car. Rates on Zipcar vehicles in Cincinnati start as low as $8.50 per hour and $69 per day. Gas, reserved parking spots, insurance, roadside assistance and up to 180 miles per day are included in the hourly and daily Zipcar rates on all Zipcar vehicles. Cars can be reserved for time periods as short as an hour or for up to several days.

Users of smartphones such as iPhones and Android devices, may download the Zipcar mobile application to make reservations, lock and unlock the vehicles as well as honk the horn to help locate the vehicle. Members can also use Zipcar’s “Reserve a Zipcar” app on Facebook to view available Zipcars and make, extend or cancel a reservation all from their Facebook account. Reservations can also be made over the phone or by using the Zipcar website.

The introduction of Zipcar could bring car sharing closer to reality city employees as well. As previously reported by UrbanCincy, the City of Cincinnati has been investigating ways  to reduce its city-owned fleet and instead use car-sharing services such as  Zipcar for certain city departments. This idea may gain some traction as City Council moves into budget season and begins to look for ways to close this year’s budget gap.

It had also been recently mentioned as a policy point by City Councilmember P.G. Sittenfield (D) in a recent e-mail. In it he states, “our fleet must more precisely match the need, and we should ensure that we are optimizing car-sharing and minimizing fleet that sits idle.”

City officials have disclosed to UrbanCincy that utilizing the car sharing service will allow the city to reduce the number of pool cars the city owns.