Though I wish they would stay independent and continue to lead the car sharing movement, Zipcar will be bought by Avis rental car company. An offer of $12.25 per share in cash is almost a 50% premium on Zipcar’s stock price and will come to a total buyout price tag of around $500 million. The deal will make Avis Budget Group Inc. the largest player in the U.S. car-sharing market, leaping ahead of Hertz and Enterprise.
The car sharing industry has grown to $400 million over the last decade, with growth expected to hit $10 billion over the next several years. Of that market, Zipcar has about 75% of the car sharing business with more than 760,000 members and a presence in 20 cities in the U.S., Canada, and Europe. There are several reasons for a jump in car sharing demand, including higher gas prices and a trend among city dwellers to borrow cars as needed instead of dealing with the hassle and costs of owning their own vehicle. Younger generations are also not buying as many cars as previous generations did.
With car sharing, customers can rent cars for an hourly or daily rate from reserved spots that are located conveniently around cities. Other car sharing programs include Hertz on Demand, WeCar by Enterprise Rent-A-Car, and U Car Share owned by U-Haul. One interesting tidbit is that according to Wikipedia, the first record of a car sharing service was in Zurich in 1948, admittedly an idea ahead of its time.
