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I told you I didn't want a car: Avis to buy Zipcar

Photo courtesy of Flickr user mag3737

AvisBudget is banking on the growing popularity of car sharing with its purchase of Zipcar

In a move that proves the growing popularity of car sharing, the AvisBudget Group agreed to acquire Zipcar for $500 million in cash. The deal is expected to be completed in spring 2013. Zipcar will operate as a subsidiary of AvisBudget in its new Boston headquarters. AvisBudget expects to achieve cost savings by increasing fleet utilization across both companies, and by leveraging their fleet to meet more of Zipcar’s weekend demand which has been limited by fleet availability.

Carsharing has grown to be an almost $400 million business in the United States, and is expanding internationally. There are two car sharing companies in the Chicago area, I-Go and Zipcar, and it remains to be seen what this deal means for both companies, as explained by a recent Streetsblog NY article.

This is not the first time car rental companies have expanded into the carsharing or alternative commuting modes.  Hertz Global and Enterprise offer hourly rentals that compete with other carsharing companies. In some U.S. cities, Rideshare by Enterprise provides vanpool and rideshare services for individuals, employers, and government agencies.

“It’s a fact of life in those places that people want the convenience of a car but don’t want the hassle of owning one,” noted Dr. David Cole, chairman emeritus of the Center for Automotive Research (CAR) based in Ann Arbor, MI “so I think the carsharing concept is going to work.”

Our recent blog post, “Dude, I don’t want a Car”, discussed the popularity of carsharing among Generation Y.  According to CarSharing.net, there was a time when "no self-respecting 40 year old man would admit to not owning a car." Yet today, Gen Y now use cars in urban America about 33% less than their Gen X aunts and uncles, due in part to the convience of cell phones, social media and the rest of the Internet. They are also open to the idea of sharing a car, or a ride, especially if there's an app for it.

And as a Commute Option, car sharing provides another option as part of our urban transportation systems. As we reported this summer, a partnership between I-GO and Christopher Burke Engineering of Rosemont replaced some of Burke’s fleet vehicles with I-GO cars. Those cars do “double duty” as they’re also parked at the Rosemont CTA Station during the week for employees to use to travel between the station and the office.

As car-sharing’s popularity grows among young urbanites, city governments and transit agencies have finally begun to understand. The Chicago Card Plus IGO is a smart card that allows I-GO members to access CTA trains and buses, Pace buses, and I-GO vehicles, making it easy to transition from one mode of travel to another. Cities like Seattle and Washington, D.C. have always had strong transit support for car sharing.

So the growth in alternative in standard car rental systems where users need a vehicle for as little as an hour continues to gain momentum.

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