I'm working in Portland, OR for a month and living about a half hour's walk to work. It's actually quicker to walk than drive or take mass transit. However, on the weekend I wanted to get out of the city and see the sights (Oregon's a beautiful state, right?). So I had a choice: ride on the light rail 40 minutes to rent a car from conventional car rental companies and pay an extra $25 per day because I'm under the age of 25 (I'll be 25 in December) or walk about 6 blocks to the zipcar and pay about the same price (or less) per hour with no age penalty fee. Easy decision. Zipcar offers a way better selection of vehicles (a BMW for $100/day or MiniCooper for $56/day...can't beat that), convenient self-service and a simple system. No paying for gas, hidden fees or waiting in line to deal with harried customer (non-)service reps.
1 recommendation for Zipcar: put a convertible mini in Portland!
1 recommendation for potential Zipcar customers: Don't expect to apply for membership on Friday and take a car out on Saturday. It takes a day or two for Zipcar to check your driving record to clear you for membership.
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Can You Give Up Your Car?
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The key to making it go, though, is having the cars and the complex logistical system to keep track of them. Griffith puts the challenge succinctly: "How do you manage 225,000 people randomly accessing 5,500 cars, 24 hours a day, seven days a week?" Griffith contends his company's edge is the tracking technology it has developed through the years. He compares Zipcar's logistical expertise to Amazon and Netflix.
The big rental agencies, though, have relationships with automakers that can provide them with a steady stream of new cars. Zipcar adds to its fleet just like the rest of us do--by going to a dealer and buying a car. What's more, the rental agencies already have a nationwide network. "We've got a footprint across the country," says Michael Coleman, program manager of U-Haul's U Car Share, which is already operating in 10 cities. "We can grow and expand into new markets faster than other car-sharing companies."
Better yet, when the new sharing services roll into town, they just might set off a price war. U Car Share charges just a one-time $50 membership fee, not an annual fee or a sign-up charge like Zipcar. WeCar's annual membership cost just $35 when it launched in St. Louis last year. (Enterprise declined to provide additional details on WeCar, other than to acknowledge it is now operating in Boston and "plans to expand the program into other markets in the coming months.").
But there's one price problem all the car-rental services share. The same $4 gas that's driving commuters to share cars is also pushing up rental rates. The hourly rate that was once as low as $7 now averages around $10 and is on the rise. Zipcar hiked prices in January and is about to boost them again, resulting in an hourly rate increase of up to 10 percent this year. Gas prices, however, are just one tenth of Zipcar's overall costs. Bigger expenses include the cost of buying cars and paying for parking. As car services take up more parking spaces, they hope they'll have more leverage to cut better deals with cities and private parking-lot companies.
And they plan to fill a lot of parking spaces. Ultimately, car-sharing providers contend they can replace car ownership. Coleman envisions entire neighborhoods sharing a single pickup truck, for example, for all their home-improvement projects. "Fifteen years from now," says Griffiths, "one-car, one-driver won't work anymore."
Don't tell that to Zipcar's new customer, Sherri Fuselier. She's suffering some serious SUV cravings on her low-car diet. "I don't want to give up my SUV. I'm a die-hard, and I need to carry a lot of stuff," says Fuselier, who admits she still drives the Jeep to work once a week. Yeah, it's good to share. But sometimes you just want to say, "This is mine."
© 2008
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