## Zipcar to Double Fleet in San Francisco Area and Expand into Chicago

##### 12 July 2006

Zipcar, North America’s largest car sharing company, announced plans to double its San Francisco Bay Area fleet within the year, expanding into new communities throughout the region while increasing service in existing neighborhoods. As part of this expansion, Zipcar is expanding service into East Bay, with 14 Zipcars now placed at locations throughout Berkeley and Oakland.

As part of an innovative partnership with Bay Area Rapid Transit (BART) to promote the economic and environmental benefits of car sharing for commuters’ short term transportation needs, most of Zipcar’s initial East Bay fleet will be located at the North Berkeley, Ashby and Rockridge BART stations.

Other Zipcars are to be located throughout downtown Berkeley. These Zipcars will include several of the 20+ makes and models in the Zipcar fleet, including Toyota Prius Hybrids, MINI Coopers, Mazda 3s and BMW 325is.

The San Francisco fleet expansion follows the recent announcement that GE Commercial Finance Services has greenlighted $20 million in vehicle financing, supporting Zipcar’s growth and enabling Zipcar to source and roll out new vehicles. The company also announced its expansion into Chicago, which now becomes Zipcar’s midwestern hub. To mark its Chicago launch, Zipcar is also crediting every new account in Chicago with$25 in free driving.

Earlier this spring, Zipcar also introduced service in Toronto, Canada, the company’s first venture into markets outside the United States. Zipcar currently has the largest active membership base of any car sharing service, with more than 60,000 members and 1,500 vehicles in 11 states and provinces.

New members are joining Zipcar at the rate of more than 3,000 per month. Zipcar claims that studies show that each Zipcar is responsible for taking more than 20 privately owned vehicles off the road while also increasing use of public transit by 47%. Members also report that belonging to Zipcar saves them more than $435 per month when compared to car ownership, with those savings generally going back into the local community. ### Comments I love Zipcar -- I've been a member for well over a year -- but I find it a little hard to believe or even understand some of the claims they make here. Where do they get the notion that each Zipcar takes 20 ordinary cars off the road? Perhaps an additional Zipcar takes a bunch of old, rarely-driven cars off the road, but there are hardly enough hours in a day for it to replace 20 cars put through average active duty (12,000 mi / year). And what do they even mean by their statement that a Zipcar increases transit use by 47%? A single Zipcar certainly does not increase systemwide ridership by 47%, and I find it hard to believe that even an arbitrary fleet of Zipcars has such an effect. Each new Zipcar member might increase his use of public transit, due to the flexibility which comes from having a shared car available for the "last mile" of his trip -- rather than choosing to drive the whole distance -- but even from personal experience, my transit usage did not jump 47% after I got my Zipcard in the mail. In market terms, Zipcar is a replacement good, to varying extents, for privately owned cars, traditionally rented cars, taxicab rides, transit rides, rides bummed off friends, walking/cycling, and simply staying home. It can encourage families to own fewer cars, and encourage riders to substitute a full length car ride with a part transit and part car trip. But it can also encourage car-less people to skip transit in favor of a car ride, or encourage people to take trips they would not have undertaken at all. The main thing is, Zipcar makes dense urban living more flexible and appealing, which in turn promotes shorter commutes and transit friendly environments. Zipcar also maintains a fleet of generally up-to-date, fun, and efficient cars, rather than your typical rental behemoths. It is very useful for areas where residential parking is in tight supply. To the extent that the availability of Zipcar tips the balance in any individual case and leads to a family giving up and extra car or moving in from the exurbs, it makes a real difference, and this effect probably outweighs the trip-generation effect. Yet some of the claims made here are so hyped up that they are hard to believe at first blush. Where do they get the notion that each Zipcar takes 20 ordinary cars off the road? Perhaps an additional Zipcar takes a bunch of old, rarely-driven cars off the road, but there are hardly enough hours in a day for it to replace 20 cars put through average active duty (12,000 mi / year). And what do they even mean by their statement that a Zipcar increases transit use by 47%? A single Zipcar certainly does not increase systemwide ridership by 47%, and I find it hard to believe that even an arbitrary fleet of Zipcars has such an effect. I don't know where their numbers come from, but consider this: if half of Zipcar members don't own cars (believeable) and given that each Zipcar supports 40 users (60,000/1,500), then each Zipcar is supporting 20 users who don't own car. It's tenuous and crude, but believeable. Here in Boston, I know at least a dozen ZipCar users, all car-less; I don't know a single car owner who is also a member of ZipCar. As for 47% -- that's a tougher number to conjure. However, I'm sure they mean that eihter (a) ZipCar users use public transit 47% more than average citizens in their community, or (B) ZipCar users use public transit 47% more often then they did in their pre-ZipCar days. Both of those stats are believeable to me. Which end of the commute do these cars favor home to PublicTransit or PT to place of work? Both? Can this system be abused by selfish people? Hogging a car? Do you reserve a car for a time period? This system is useful in cities with rapid transit systems, and lower than average car ownership, like NYC. I found a comment about the savings going back into the local community quite interesting. The question for me is why was the savings spent at all? How was it spent? Did it go to locally owned businesses or franchise chains? Once you've covered your basic necessities, from what I've seen, most urban spending is for transient entertainment (meals, public events, cable television, etc.) or disposable goods (iPods, cell phones, entertainment equipment). so remind me again, why are the savings a good thing if the money is wasted and you have no improvements in transportation time? Notice they said this service takes "privately" owned vehicles off the road. Much different than saying they are taking cars off the road. Without a better study, it is probably not warranted to conclude that this service is having much impact in taking cars off the road. On the other hand, if one decided not to buy a car because of this service, one would tend to use public transit more often than if one could simply drive one's personal car out of one's driveway. It seems like one would only use the Zipcar when one really needed to, i.e. transit alternatives were poor to nonexistant for the particular trip or trips taken. This is because one is paying closer to the full costs of auto travel rather than just the perceived variable costs of a privately owned vehicle. stomv: You've just met your first Zipcar member who also owns a private car, in Boston. And I have several friends in the same situation. I also have plenty of car-less friends who are members of Zipcar, but the thing is, they were carless before they joined, and they did not seem to be on the verge of buying a car, only to turn back at the last minute, because of Zipcar. Zipcar reduces car ownership by convincing some occasional car-users that they don't need a whole private car to themselves, and by convincing couples or families who live in the city (and drive a fair bit) to get by on one or two cars instead of two or three cars. But Zipcar does not change the habits of those who drive ten miles each day to work, and back again -- it does not take those cars off the road. It does not even convince some people to switch to public transit for such commutes, using a car only for the "last mile" -- paying for the eight hours of idle time while you sit at work is pointless, so people don't do it. Lotfw: Go to zipcar.com for a detailed explanation of how the system works. The short answer is that Zipcar places dozens of marked cars in designated parking spots all over a neighborhood or city. Members use a special website to reserve specific cars for specific blocks of time, measured in half-hour increments. The price is$8-$10 per hour, or$60-$80 per day, including gas, insurance and mileage. Electronic gizmos unlock the car for you when you pick it up, and a fleet-fueling card allows you to tank up if you run down the gas while driving around, or if you find that the last guy did not tank up. You return the car to the spot from which you picked it up. If you are more than five or ten minutes late, you get hit with a late fee, especially if someone reserved the car right behind you. If that time is unreserved, you can use your cell phone to call in and extend your block, avoiding penalties. Thinking this scheme through, you will realize that Zipcar is used neither for the home-to-transit nor for the transit-to-work legs of a daily commute. You can't take them one-way, so you'd have to pay for a whole day of idle time while they wait at the station parking lot or your office parking lot. Nobody does it, for obvious reasons. Zipcar is best for shopping or grocery trips, visits to friends that don't last too long, taking people to the airport, or, in one recent personal experience, hightailing it to New Hampshire and back to put a bunch of stuff in a friend's basement for storage. Just the amount of gas I burned on that trip alone was more than the rental fee that I paid for the whole reservation. That's why I've said that Zipcar does not replace cars put into daily, mainline service -- certainly not 20 of them. It makes sense for people living in dense city districts, where parking near your home alone costs at least$100-\$150 per month, on top of which you add insurance, gas and the cost of the car itself, and where you don't need your car for every trip of every day. For what the average person spends yearly on car costs, you could probably get around 700 hours of Zipcar time -- plus you don't have to waste time and energy bringing the car in for maintenance, shopping around for insurance, etc. That's a good deal of having-a-car-around time, if you don't need to take it to work.

country mouse:

I find it hard to believe that I have to explain why saving money is a good thing, but I'll try. The savings generated by Zipcars go where any other savings go -- some portion to long-term savings and some to increased consumption of other sorts. Economists study these things and have the numbers, but I don't have anything too specific.

1. Savings can be saved. That is, put away for retirement, or college, or whatever. Free up some amount of cash otherwise going to necessities or near-necessities (transportation), and you increase the chance that someone will actually save that money.

2. Savings can be spent locally. Instead of sending money off to Japanese car manufacturers or Arab oil merchants, you can spend your money on "transient entertainments" which happen to be provided, usually, by other local residents. You're not sending money to people half way around the world, some of whom don't like us. Spending locally is good for the local and national economy, and makes each place a more pleasant place to live, usually. I'd rather see my neighbors working as restaurant chefs instead of being unemployed, and I can do that if I spend more money locally on meals out instead of on cars sent in from Germany.

3. Savings can be spent on things that make you happy. Transient entertainments like meals out, plays or movies, ipods and the like tend to make me happier than, say, spending money on gasoline. Even if my trip times stay the same, having more money left at the end to do fun things qualifies, in my eyes, as a "good thing."

What percentage of Zipcars are made in North America. All the cars mentioned are Japanese or German. Could Ziptruck be a good idea? I bought an old van for when I need to move big things once in a while but six months of insurance is more than I paid for the van.

Most Zipcars are imports, but they have a few Ford Escapes and Focuses. They have a small number of Honda Elements and pickup trucks for hauling things around, but a more traditional rental company like Enterprise or even U-Haul is probably a better bet for such purposes. Zipcar is focusing on small, efficient, "cool" cards aimed squarely at the young urban professional crowd, who need to move people and not things, by and large.

nbk, i'll have to disagree with you on point 2, mainly because by using zipcar you're not decreasing the amount of money you're sending halfway around the world. however, i will agree that you might spend more money locally.

also i don't get this whole "halfway around the world" deal. if they make better cars, why are they any less deserving of our money? this is capitalism guys.

Oversears automakers no less deserving if they put out a good car -- I agree. But the fact remains that sending more money overseas does us less good than sending less money, given the same amount of utility derived from spending the money.

I would argue that Zipcar does likely result in less money spent on cars (and therefore spent overseas), to the extent that it does cause a certain number of people to forego purchasing cars to begin with. I think that some amount of people forego cars because of the availability of Zipcar, I just express doubt over whether that actually amounts to twenty cars foregone, because my gut tells me that it probably amounts to a smaller number. I also think that Zipcars marginally reduce the total oil consumed, because Zipcars tend to be highly efficient models, and Zipcar probably does encourage some public transit use. I don't think the effect is large, however, because (based on personal consumption patterns) Zipcar also creates a certain number of rides where none were before, eating into the savings. My guess is that the net effect is slightly positive, regarding oil consumption.

Only if the Zipcar fleet is more skewed towards imports than the fleet of cars that would otherwise be purchased privately would the import reduction effect the dampened. But in the cities where Zipcar is located, and among the consumers whom they target, American cars are very unpopular, and thus Zipcar's heavily imported fleet mix is probably no more skewed towards imports than what the average person would buy.

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