Contract Cars: The evolution of car rentals

Published: 16 Apr 2009

By Mary-Beth Kellenberger, Senior Consultant Automotive & Transportation

Car sharing was once viewed as a tree-hugger/commune phenomenon, but is now a rising commercial automotive opportunity. The practice has its roots in non-profit ventures, where the association of members jointly owned and maintained a fleet of vehicles for members to reserve on an hourly, pay-per-use basis. According to the Institute of Transportation Studies (ITS) at the University of California Davis, there were 33 car sharing programs in operation in North America in 2008, serving over 319,000 customers with 7,500 vehicles. There is really only one company, Zipcar, that is International in scope. Zipcars can be found in Canada, France, England and the U.S. Although the company was not the inventor of car sharing, Zipcar developed the concept into a profitable commercial venture. In 2009, Zipcar towers over the competition in terms of markets served, vehicles in operation, members, and revenues. In the 49 markets it serves across North America, Zipcar has over 5,500 vehicles (73% of the market) serving an estimated 250,000 (78% of the market) customers. Car-sharing programs are, by their nature, very local, meaning many competitors can exist in the market space without truly experiencing direct competition in this early development phase of the industry. That is all about to change as new participants U Car Share, by U-Haul International, WeCar, by Enterprise Rent-A-Car, Connect by Hertz, and municipally operated companies enter the market. John MacSween, General Manager of Zipcar Vancouver, believes that the influx of new market participants is really a testament to the growth opportunity. Zipcar alone experienced membership growth in 2009 to over 250,000 members, up approximately 38% over 2008, with its vehicle fleet increasing by about 10% to 5,500.

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