The Car-Sharing Economy

Jan 2 2013 @ 6:38pm

Felix Salmon sees the logic of Avis buying Zipcar:

[F]rom Avis’s point of view, it’s buying the clear leader in what is probably the future of car renting. We’re only at the beginning of a long secular decline in the number of cars owned per household: as America becomes increasingly urban, there’s much less need for households to own a car, or a second car — and it becomes much cheaper to just rent cars by the hour or the day when you need them than it is to own a car outright and just leave it parked and useless for 99% of its life.

Yglesias goes into more detail:

Zipcar's big outstanding problem is that demand for Zipcars is highly spiky. People who want to use a car to commute to work are going to want to own their own vehicle. And people generally need to work during weekdays. Which means that demand for spot rentals is very highly concentrated on the weekends, which makes it hard for Zipcar to manage inventory efficiently. Avis says that combining its fleet with Zipcar's will make it much easier to meet those demand peaks, as individual vehicles can switch from hourly rental to traditional rental on a day-by-day basis.

Steven Pearlstein, on the other hand, fears that Zipcar's brand will be tarnished:

Oh, sure, Avis executives will say how they respect Zipcar — its culture and its way of doing business — and promise to preserve it. But a year down the road when it comes to some decision in which they will have to forgo some cost savings or some revenue increase in order to maintain those differences, the decision will be to do it the “Avis” way. And that will be it: Zipcar as we know it will be history.