Avis buys Zipcar for $500 million...does it matter?

Like a couple of you out there, I use the car-shares so I can avoid car ownership and rely on biking everywhere.  So I find that car-sharing does enable the bike lifestyle to some degree.  It's an issue of convenience as much as ideology, but this buyout certainly does bring Zipcar down a notch in my opinion. I'd like to know how others feel. 

In case you blinked last week and missed the acquisition of yet another start-up company by a mega corporation, the car rental mogul Avis Budget Group, Inc bought out Zipcar, Inc for $500 million.  

Though currently under investigation, the transaction is expected to be completed by this spring.  Here's the official press release.

While some concern has been voiced around the web that Avis will "ruin" Zipcar (the company, but especially the user experience), I'm wondering about something else entirely. 

Does this merger render irrelevant Zipcar's long-touted "green benefits"?  The fleet whose list of eco-savvy taglines includes Fewer cars. Way fewer. is about to acquire one million additional vehicles.  Does anyone else find that funny?  

Or is it okay, since Zipcar's goal has always been to rent you a car - with any sort of environmental or societal benefits being merely incidental, though perfect for marketing purposes? 

In the mean time, I-Go take note: if the predictions manifest and Zipcar makes some less-than-pretty changes, you may have a fresh shot at the market. 

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Permalink Reply by Duppie on January 9, 2013 at 10:31am

I think that it might strengthen the green benefits. Rental companies like Avis focus on business rental (as compared to a company like Enterprise). These rentals take place mainly during the week. During the weekend their usage rates tend to be a lot lower. Instead of having them the rental cars sit at the airport, they tend to use the Avis rental cars at the ZipCar location to satisfy the weekend demand (which I understand is when ZipCar rents the most cars). Seems like a win-win to me: higher usage rate for their cars (i.e. more revenue per car) means fewer cars need to be purchased (i.e. less environmental impact) to satisfy overall demand.

Permalink Reply by Tony Adams on January 9, 2013 at 10:46am

Companies rarely get better after they get bought. They get bought because someone thinks they can squeeze some profit out of the deal. Who pays for that? Customers and employees (and often taxpayers). I've been advocating for the local option, I-Go for a while now, so this may seem like a sour grapes suggestion, but really has Dominick's or Jewel improved since they were taken over by out of state companies? Has anyone gotten a good deal at Sam's Liquors lately? Is the Chicago Tribune even remotely as good a paper as it was before the Sam Zell fiasco? Do you remember what a Special Export from the G. Heileman era actually tasted like? Can anyone provide an example of any company or service which became a better deal for customers or a better place to work for employees in the long term after a buy-out? Support the local option!

Permalink Reply by Matt M. 18.5KM on January 9, 2013 at 3:58pm

I imagine Zipcar with applicable Visa travel points.  That is what I dream about.  Any time I want a Zipcar, I would like to use the points on my credit card, but Zipcar hasn't offered that in the past.

Permalink Reply by Joe Guzzardo on January 9, 2013 at 8:20pm

Well okay, lets say the most dire predictions come true and lets say I-Go is acquired by Hertz. I'd like to think that more car sharing companies will rise up and fill the void. But I question the Zip Car green benefits page, anyway. Where do they get the numbers to back up those statements? 

Permalink Reply by Night Owl on January 10, 2013 at 2:54pm

I'd think it would be difficult for I-Go to sell because they are actually a non-profit; a wing of the Center for Neighborhood Technology, in fact, and they do an absurd amount of work in the field of sustainability.  Practical work, innovative work...including, pioneering the practical applications of TOD, starting CNT Energy, and - of course - the mind blowingly innovative Housing + Transportation Index.

If you are at all interested in helping an organization change the face of sustainability and not just a greenwashed company, drop Zipcar and switch to I-Go.


Joe Guzzardo said:

Well okay, lets say the most dire predictions come true and lets say I-Go is acquired by Hertz. I'd like to think that more car sharing companies will rise up and fill the void. But I question the Zip Car green benefits page, anyway. Where do they get the numbers to back up those statements? 

Permalink Reply by Duppie on January 11, 2013 at 3:12am

Well put. I'd love to root for the home team, but they are looking a lot like the Cubs. Adorable, but without results.

Last year Zipcar announced availability of vans. Within 2 weeks after the announcement I saw a few vans at locations that I regularly ride by.

Last year i-Go announced the installation of 2 electric cars in Andersonville. They even started some of the infrastructure work for it. A year later, still no cars.



h' 1.0 said:

I think the main barrier would be that I-Go doesn't seem to have the resources to devote to its current level of market penetration, let alone any sort of significant growth.

Night Owl said:

I'd think it would be difficult for I-Go to sell because they are actually a non-profit; a wing of the Center for Neighborhood Technology, in fact, and they do an absurd amount of work in the field of sustainability.  Practical work, innovative work...including, pioneering the practical applications of TOD, starting CNT Energy, and - of course - the mind blowingly innovative Housing + Transportation Index.

If you are at all interested in helping an organization change the face of sustainability and not just a greenwashed company, drop Zipcar and switch to I-Go.


Joe Guzzardo said:

Well okay, lets say the most dire predictions come true and lets say I-Go is acquired by Hertz. I'd like to think that more car sharing companies will rise up and fill the void. But I question the Zip Car green benefits page, anyway. Where do they get the numbers to back up those statements? 

Permalink Reply by Duppie on May 28, 2013 at 4:23pm
Permalink Reply by in it to win it 8.0 mi on May 29, 2013 at 2:12am

Doesn't matter.

Permalink Reply by Anne Alt on May 29, 2013 at 3:18am

That's what I'm hoping for both I-Go and ZipCar.  I hope that we don't have unfavorable fee changes and that we're still able to reserve the specific car we're expecting to get.

Duppie 13.5185km said:

I think that it might strengthen the green benefits. Rental companies like Avis focus on business rental (as compared to a company like Enterprise). These rentals take place mainly during the week. During the weekend their usage rates tend to be a lot lower. Instead of having them the rental cars sit at the airport, they tend to use the Avis rental cars at the ZipCar location to satisfy the weekend demand (which I understand is when ZipCar rents the most cars). Seems like a win-win to me: higher usage rate for their cars (i.e. more revenue per car) means fewer cars need to be purchased (i.e. less environmental impact) to satisfy overall demand.

Permalink Reply by Julie Aberman (Hochstadter) on May 30, 2013 at 3:08pm

I didn't realize a non profit could sell to a corporation. 

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