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Zipcar member Amanda Birnbaum holds an electronic car key to a Zipcar in New York City back in 2002. The company has been offering an alternative to car ownership by providing members with hourly or yearly rates for usage and pricing plans tailored to individual members since 2000. - 


Doug Krizner: Have you ever needed to rent a car for less than a day? A number of startups are renting vehicles by the hour. Now traditional car rental companies want a piece of that action. Lisa Gray reports.

Lisa Gray: Earlier this year, Kate Bolick moved from Manhattan to Brooklyn. She used a car-sharing company called Zipcar. It's a Boston-based business that rents vehicles by the hour.

Kate Bolick: I started using Zipcar because I needed to move a bunch of stuff out of my ex-boyfriend's apartment, and then I realized it was a little bit more than a cab ride but not enough to rent a truck over.

Plenty of people, like Bolick, live in cities but don't own a car. Like fellow New Yorker Jon Kalish. He might rent a vehicle for a shopping trip.

Jon Kalish: On a couple of occasions I've rented vans, you know if I was buying something big in a store and needed to bring it home I would rent a van, $69, $79, $89 for a day.

Kalish uses regular rental companies because he likes the flexibility of having a vehicle all day. But renting by the hour can be a lot cheaper. With Zipcar in New York you can drive four hours a month for $40.

Car sharing companies, like Zipcar, City CarShare in San Francisco and Flexcar in Seattle, are popular with city dwellers.

Now mainstream car rental companies are moving in on that market. Enterprise now rents by the hour in eight cities, and Hertz recently started renting by the hour in Manhattan.

Chris Brown is managing editor of Auto Rental News. He says hourly rentals can help car rental companies maximize their profits.

Chris Brown: When the cars are on the road you're making money. Let's say you've got a fleet of 100 vehicles and during the week you've got 65 of those on rent. You want to get those other 35 cars on the road.

But it won't be easy for rental companies to steal the by-the-hour market. For one thing they have higher overhead, which translates to higher prices. Four hours with Hertz will cost around $98.

At Hertz, you have to sign a contract and pay for gas and insurance. The car-sharing companies include gas and insurance in the price. And they do all their business online, which saves the customer time.

And time is money, after all.

In New York, I'm Lisa Gray for Marketplace.