22 thoughts on “ZipCar, Google, cars and the inevitability of the Internet”

  1. The services industry is on the rise. Will we ever see a time when there are only car services and the concept of owning a car would’ve already ended?

  2. Great article, I think this year will be amazing for tech.

    I do have one question, do you think that services like these are disrupting innovation, as in, investments in new sources of energy and/or alternate modes of transportation?

  3. I appreciate this perspective on the new guard, the Silicon Valley technology industry, having matured to have our own very savvy business leaders with much to offer “traditional” enterprises.

  4. This is a very smart strategic move. I just hope that the small-tech-culture of Zipcar is not smashed and corporativized.

    The combination of Zipcar + robotic cars + large-scale real-time car-sharing optimization provides a new open field to Avis’ future.

    IMO Zipcar is not complementary (as a main feature) to Avis biz. It provides Avis a viable NEW path to the future, and I am convinced that this new biz model will get Avis into taking a good bite from the following games:

    – taxi and car rental
    – public transportation
    – parking space
    – car retail (+service)

    This will be massive. Avis will have to change its mission statement from “We will be a leader in the vehicle rental industry by… ” to something like: “We will be a leader in satisfying people’s transportation needs by… ”

    I thought Avis was on the way to its extinction. This has proven me wrong.

  5. Great article. One little point on content: “The world” did not come around to Antje & Robin’s idea, America did. Outside of the USA, Zipcar is actually quite small, unless they bought the local carshare (as they had to in the UK, Barcelona & Austria). This is one of the big reasons that Scott Griffith’s dream of “50 great Zipcar cities around the world” stalled, Steve Case bailed, and they had to turn to Avis to keep going.

    1. CarsharingNet

      I think the world is coming around to ZipCar way of thinking and if anything Europe and Asia are going to be faster growing markets because the resource sharing is an inherent part of those societies. That said….I think ZipCar was on the right track, buying its way into Europe. Too bad they had to sell to others.

  6. Om, you’re talking about cars and technology but you missed self-driving cars. Long term, I think those are very major.

  7. So a shrinking behemoth buys a money losing upstart…I fail to see how this is a good thing. ZipCar seems revolutionary 12 years ago when they got started, but just stale to me nowadays. And I think it is a big stretch to suggest that the drop in revenue or profits for large rental car companies had anything to do with a timesharing model that was about 1/25 the size, at least as far as financials go. The rental car companies suffer far more from changes to insurance rates and laws as well as fuel price volatility than car sharing, although I do think that a sharing model could actually allow rental companies to do a better job of baking in fuel price and of smoothing out some of the peaks over time.

  8. I read somewhere that owning a car in the US costs about $5000 per year. The average person drive 1 or 2 hours per day and leave our cars unused and depreciate for the other 22 hours . When I visited S. America, I found that people there could not afford their own cars, yet have access to efficient transportation through buses, van-pools and taxis for around $2 – $4 per day.

    The recent recession have forced citizens in America to find ways to get by with less income. The marriage of ZIP and Avis provides opportunities to improve transportation efficiency by making use of Avis’ under-utilized fleet of cars to provide ZIP with mass ubiquity in urban areas. Using smartphones, user are able schedule access to rentals in realtime. When hourly rental mass adoption becomes significant, users may no longer need to “hang-on to their cars” when they plan to park for more than an hour. They simply make their car available when they park and use their smartphone to reserve the closest available car 15 minutes prior to needing transportation.

  9. Really like the article. The analysis and the advice is what a good eco-site should give so as to put the story in to perspective for a novice reader

  10. Om, your “revenue chart” is totally fake. It reflects not at all Avis, but instead Avis + Cendant and then Avis. While Avis has nothing near the revenue growth of Zipcar, it’s a growing company and has been for years. Quite frankly, I have no idea what that Y-charts chart is showing or why you felt it was worthy of inclusion in what is otherwise a well thought out post, but it’s just… wrong…

    Avis annual revenue in 2006 was $5.7 billion, up from $5.4 billion in 2005. It was $4.8 billion in 2004, $4.7 billion in 2003 and $3 billion in 2002.

    My source, by the way, is Avis annual report, filed with SEC, not some ridiculously inaccurate Y-charts file that is for all of Cendant, presumably. It’s here: http://ir.avisbudgetgroup.com/secfiling.cfm?filingID=1193125-07-44472&CIK=723612

    The business is slow growing and dull — certainly Zipcar might provide some “zip” if you will — but it’s not falling off a cliff like your highly misleading chart would indicate.

  11. Om, I wouldn’t hold your breath for power utilities to be hot to trot as change agents. They will likely do some experimentation in the hopes that great sites like GigaOm will write stories about them (giving the perception that they’re really out to help the customer). Utilities are regulated localized monopolies and there is very little incentive for them to change (where the changes would be harmful to their bottom line). Just ask Al Gore!

  12. Zipcar is a fascinating example of this trend, and so are Google’s ventures into automotive technology. Maybe in the not-too-distant future people will think of cars as just one more kind of mobile device. Since automation will free up the occupant’s hands and attention for other things, I can envision cars becoming fully interactive environments, complete with downloadable apps, that just happen to be able to take you places while you’re working, studying, surfing the Web, etc. But who in the future economy will be able to afford these iCars? That’s going to be a big question. This piece is great food for thought – thank you.

  13. This thread reminds me of a talk that I witnessed by the great Peter Drucker at a JD Power conference many years ago. I vividly remember the talk, because you could hear a pin drop in the room. His speech focused on the day when the automaker’s brand would become obsolete, because the consumer would eventually pick and choose pieces of vehicles from different makes based on their excellence (e.g. – Audi, quattro drive, Toyota engines, Honda bumpers) to assemble their own custom car. He envisioned a day, when this would all be done on a system – by picking, clicking and then having the vehicle built offshore or wherever and ultimately delivered directly to your home. No dealer, no brand, just a custom made vehicle to your specs. This was way before the internet. Interesting to see how close we are coming to his vision from some 20 years ago. It would not surprise me to see this actually occur in my lifetime.

  14. In a close future we will be forced and motivated to become more efficient and savy in everything, from our time to spending on vehicles, houses etc. Zipcar kind of a solutios will pop in many industries.

  15. Great story – so true that these traditional businesses need to learn and embrace ideas from the tech industry to be able to cater to changing consumer demand.

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