Car-Sharing is becoming big business and Enterprise and Hertz both plan to participate, giving the leader Zipcar a run for the money.
This year, Enterprise is launching Enterprise Car Share after buying several small car-sharing firms on the East Coast. Between PhillyCarShare and its own WeCar, Enterprise already has 58,000 car-sharing members and more than 540 locations, reports Bloomberg. It’s the second largest car-sharing service after Zipcar, with hourly rentals in NY, Philadelphia and Boston and 50 college campuses. It plans to expand to other major and secondary cities.
Hertz’s Global Electric Vehicle (EV) plan aims to be the first to provide a range of EVs and charging stations on a rental and car-sharing basis at global scale. It’s car-sharing service, Hertz on Demand, will be available for all 375,000 of its rental cars in about a year.
U-Haul also has a car-sharing service in Berkeley and Daimler is expanding its electric vehicle car-sharing service nationwide this year.
Zipcar (NASDAQ: ZIP), the largest car-sharing service, has 673,000 members and 8,900 vehicles in urban areas and college campuses throughout the US, Canada and UK.
Through a partnership with Ford, it provides $300,000 in grants for student organizations through the "Students with Drive" grant program.
As an alternative to the high costs and hassles of owning a car, the Zipcar hourly and daily rates include gas, 180 miles of travel per day, insurance, reserved parking spots and roadside assistance.
Last year, Zipcar had its first two profitable quarter. This year, it reported a loss as it expands into Europe, even though revenue grew 20% in the first quarter to $59.1 million (from Q1 2011), and membership grew 23%. It expects to have its first profitable year in 2012, but its shares have fallen about 24% this year because of anticipated competition.
Hourly car rentals is a $1.8 billion market, about 6% of the US car rental market, but it’s expected to rise to $3.3 billion by 2016 in North America and $10 billion globally, according to Frost & Sullivan, says Bloomberg.
So far, Zipcar’s biggest concern is the saturation it’s achieved in big cities, not the looming competition. It now has to grow in smaller cities and in Europe, where competition is much stiffer.
Daimler’s Car2go is well established in Europe, along with BMW’s DriveNow and other networks.