The Day After Zipcar Makes a Profit — Part II


ZipCar has used a variety of innovative advertising techniques for a new market (Image Via

The day after ZipCar turns a profit will find us asking some big questions about the potential split between smart growth, the next generation of electric vehicles — and the possibility of a completely different path. As I pointed out in my last post, car sharing has become a serious force in mobility - and with ZipCar going public in 2010, we might change how we think about getting from A to B.
Cars or Mobility?

As their marketing slogan goes, Zipcar offers mobility when you need it. And as you may know, on a daily basis Americans do not use their car often. In fact, the average American driver spends just 55 minutes a day behind the wheel (Read more Bureau of Transportation statistics). And by Zipcar's analysis, each car it adds to its fleet keeps up to 15 private cars off the roads. Since transportation represents the second largest consumer expenditures in the U.S. (19.1%) there is certainly potential for gains in terms of efficiency and dollars (Via UC-Berkeley PATH analysis).

Stacked up against electric cars and transit-oriented development, one could argue that car sharing merely presents a complementary solution, one that might even become a public service, as adopted by Philadelphia for example. You could also argue that Zipcar and its ilk will stall the demand for, and thus move towards, transit-oriented development. This has far-reaching implications since cities take a long time to reshape, and the electrification of our fleet will certainly not happen overnight. However, we can at least agree that widespread car sharing would obviate the need for a good amount of cars right here, right now.

So maybe the day after Zipcar turns a profit is the day we realize that car sharing presents an incredible opportunity in the cities we live in now. As a recent study in Environmental Science and Technology elucidated, there is a significant opportunity right now to mitigate coming CO2 concentrations in our cities due to their increasing density in the future. And because car sharing works in synergy with other transit options, car sharing may be the hitherto-missing link to jump-start urban multi-modality.

As evidence of that, a survey executed by the Transportation Research Board in 2005 found that, " nearly 40% of members state that they use transit more often as a result of their involvement in carsharing." Similarly, according to a survey done by the Washington Metropolitan Area Transit Authority, "Members of Zipcar in Washington, D.C. report a 46% increase in public transit trips, a 10% increase in bicycling trips, and a 25% increase in walking trips." Further, according to a Zipcar survey, on average their members drove 5,205 miles per year before joining Zipcar, and currently drive an average of 1,068 miles per year (Via ZipCar).

The New Market of Mobility
When the dust has settled, Zipcar may find it carved a permanent space for itself in the mobility market, one we have yet to truly understand. However, some researchers have begun to tease out the coming solutions-based market by studying perceptions. For example, two papers examined how car sharing members "learn the true cost of driving" by starting to consider the variables costs of driving. In other words, "The static expense of owning and operating a personal vehicle is turned into a variable cost of user fees based upon time and miles driven (Via GoTo2040)."

This differs from vehicle owners who consider car payments, insurance, and other costs, as sunk costs, which means that only gasoline and parking are considered when weighing transportation options. Of course, this may just be the latest piece of evidence that we do not always act rationally when it comes to mobility and economics. However, the researchers also found that once car sharing members gave up their car, they understood (and acted accordingly) that the default option for traveling does not always have to be the car. How many will follow suit?

By:Tali Trigg - Stanback Intern with RMI's Office of the Chief Scientist

More Zipcar posts on TreeHugger.
Service My Parking Space Zipcar
Zipcar - A Product Becomes a Service
Car-Sharing Bonanza: Zipcar and Flexcar Merge
Hertz Rolls Out Car-Sharing Program to Compete with Zipcar ....
Occasional Car Program Sets the Pace in Denver, Colorado

The Day After Zipcar Makes a Profit — Part II
The day after ZipCar turns a profit will find us asking some big questions about the potential split between smart growth, the next generation of