Friday, June 15, 2012

Can Zipcar Keep Zipping Along?

Zipcar is watching rent-by-the-hour competitors put the pedal to the metal these days. Zipcar pioneered this "car sharing" niche in 2000, trumpeting the tech-friendly, eco-friendly aspects of renting by the hour instead of owning or renting by the day. No rental counter, just click to rent online or on your smartphone. Zipcar has more than 700,000 members nationwide who pay an annual fee to participate, and it projects additional growth for years to come.

Now much bigger players are making a big splash in this ever-expanding market.

Hertz On Demand is pushing its large fleet of cars for every taste and budget, and its many locations--plus the lack of membership fee, a pricing advantage for those who don't expect to rent very often.

Enterprise has been buying up local and regional hourly-rental car firms, rolling them into its Enterprise Car Share business. Its point of competitive differentiation: Newer models.

Large competitors have the marketing muscle to educate more consumers about the benefits of hourly car rentals. Zipcar's first-mover position means it has high brand awareness among customers in the markets it serves (especially on-campus locations). But can Zipcar continue building its membership as quickly as in the past, now that Hertz and Enterprise are determined to drive off with a share of this market?

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