Has Zipcar just turned the corner?

Providing transportation for businesses might just be the solution for the little car-sharing company that could.

By Minyanville.com Aug 28, 2012 10:05AM

What is Zipcar Inc. (ZIP) going to be when it grows up?


It doesn't seem to be sure. Billed as the world's leading car-sharing network with more than 700,000 members and 10,000 vehicles throughout the U.S., Canada, the UK, and other locations, the company's stock has tanked since it went public in 2011. A stock that cost $30 a share at its IPO, Zipcar is currently trading at $7.95 and continues to post weaker-than-expected results.


The company's aims are noble -- can Americans really expect to keep using cars the way we have? -- but the company seems to have run into a situation where it just has to wait for everyone to realize how much potential customers need its services.


Every so often, though, Zipcar will go and make deals like the one it announced last week: a partnership with the City of Houston to provide the city's municipal fleet with cars and Zipcar's "FastFleet" management system.

Good for Houston (a city with some serious catching up to do when it comes to going green), but also good for Zipcar, whose efforts to spread into other markets haven't received much attention until now. With revenue from operations like this that fall outside their normal customer base, Zipcar may be able to wait out the slow growth from its other services.


Should General Motors (GM), Ford Motors (F), and the other big auto companies be quaking in their boots over the day Zipcar finally figures out what it really wants to do? Absolutely they should.


Car ownership is down and will continue to fall among young people (already short of funds, thanks to college loans) as they move to cities and use more public transportation.


What's more, Zipcar has been really good at reading patterns among Millennials, who increasingly value access over ownership; for young people, there's no difference between "my car" and "the car," a pattern that might spell disaster for the already-weakened automobile industry.


And even despite Zipcar's miserable market performance, part owner Stephen Case (of AOL (AOL) fame) just spent over $4 million of his own money in August alone buying the company's shares. His purchases could be an attempt to instill confidence in the company's stock; they could also be evidence of Case's genuine confidence in the direction of the company.

Zipcar's other recent press release might give some clues as to why the part owner is so optimistic: It's the announcement of a massive expansion of the Zipvan service that will raise some eyebrows among the folks at U-Haul (UHAL).


The idea of shared access isn't just big among young people; businesses are starting to see the benefits of not having a bunch of vans sitting around when they're not being used. This -- the expansion of shared transportation among businesses -- could mark a sea change in the way Americans use automobiles in the coming era of renewable energy, limited fossil fuels, and widespread efforts to combat climate change.


If Zipcar makes as much sense for businesses as it does for city-dwellers, then we may soon see a day when more cars carry the Zipcar logo than do not.


More from Minyanville:

Aug 28, 2012 1:40PM
As an engineer, I see no advantage in helping "alternative energy, etc." by having fewer vans idle. An idle machine does not pollute or waste energy. Having shared vans/autos is old hat. Avis and others do that. Some bring the car right to your door. The real stopper to the Zipcar plan is redistribution of the cars. You could see them all migrate to one area and need to be moved. This puts more mileage and pollution into the plan. Expanded public fixed route transportation would make more sense. Just look at the lack of cleanliness in returned rented cars to see why the public would not prefer this option. Dirty buses are hosed out daily.
Aug 28, 2012 3:45PM
are they going to be using the chevy dolt, I mean volt, cuz GM just announced it's suspending it, again, due to slow sales, huh?? what?? no!!! but our illustrious nutjob disgrace of a marxist pres spent billions bailing out GM, basically handing it over to those scumbag corrupt unions and look what happens, nobody's into the "green" energy bullsh it are they, especially when that bullsh it costs 46 grand and has about as much room as a mini cooper, so let's look at the situation 6 "green" energy companies bankrupt to the tune of 800billon, that billion with a big B, GM aka obamamotors "struggling" like the stocks are with this ridiculous chevy dolt, I mean volt that would've been canceled 4yrs ago since it was too expensive to produce and would never turn a profit, you know "profit" a horrendous word in the obamazombie land of mediocrity, dispair, and people getting their fair share, right, their fair share of nothing, no jobs, no prosperity, everybody's the same, equally miserable, equally unemployed and foreclosed on, thanx guilty white people for voting in that black racist muslim scum, you sure proved that your combined total IQ is about as smart as a potted plant, nah not even that smart
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