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eCommerce - Wednesday, October 31, 2007

Car Sharing's ZipCar Merges With Flexcar

Zipcar is merging with rival Flexcar. No financial terms were disclosed. The greater entity will be known as Zipcar with Zipcar's CEO Scott Griffith as CEO and will retain Cambridge, MA as its HQ.

This seems like good timing for such a deal:

+Car sharing has proven that it has legs but the sector has nowhere near reached its potential.

+ The merged Flexcar and Zipcar may make it the biggest player in the sector and enable it to raise further funds to grow faster than the competition.

+ The new Zipcar claims 120K members and 3,500 vehicles in more than 35 cities, including Boston, NYC, Chicago, San Francisco, Washington DC, Vancouver, Toronto and London.

+ Competition from Avis and Hertz may well come. Uhaul has already launched a rival program.

If you haven't tried car sharing, it works like this: You pay your monthly dues to join the Zipcar club. With that you get a smart card that you can use to get into Zipcars which are parked in small numbers around a number of larger cities. Via Zipcar's web site or using your mobile phone you can reserve a car for an hour or a day. You then have the freedom to get groceries or drive out to the beach for the day without having to own a car and pay for parking. You can drive from $7.44/hr & $55.25/day.

Zipcar has raised around $38M in VC funding from Benchmark Capital, Greylock and Globespan. Flexcar's owner -- investment firm Revolution LLC, controlled by AOL co-founder Steve Case -- will be the largest individual shareholder in the new company.