Avis to buy Zipcar for $500 million
A Zipcar drives past a cyclist in London, England.
The car-sharing service Zipcar is getting a new owner. Avis Budget Group, one of the largest car-rental companies, is agreeing to buy Zipcar for approximately $500 million.
Zipcar and other car-sharing services are different from conventional car rental. You don’t go to the counter. Instead, you get a membership, then look online for the nearest parked Zipcar near you. Car-sharing is pitched at drivers who might want an alternative to owning a car.
“Whether it’s to go visit a friend, or go on a shopping trip, or throw your golf clubs in a car and go play golf somewhere, those are the types of transactions being utilized with car-sharing,” says John Healy, who follows the industry at Northcoast Research.
Healy says the car-sharing companies like Zipcar are growing faster than the conventional brands -- that’s why Avis wants in. While the rental business is down to just three major companies, Zipcar is one of a few upstarts using technology to change the business.
“The standard model of getting off a plane, going to a rental counter, will be challenged over the next several years,” says Neil Abrams, an industry consultant with Abrams Consulting Group.
Companies like Avis clearly would rather have a part of that change instead of losing out.