Support our non-partisan non-profit newsroom 💜 Donate now

Avis to buy Zipcar for $500 million

Dan Bobkoff Jan 2, 2013
HTML EMBED:
COPY

Avis to buy Zipcar for $500 million

Dan Bobkoff Jan 2, 2013
HTML EMBED:
COPY

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. 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.