Why Avis Buying Zipcar Could Actually Be A Good Thing

Why Avis Buying Zipcar Could Actually Be A Good Thing

Avis announced overnight that it would be acquiring car-sharing service Zipcar for roughly half a billion dollars, a deal that’s expected to close by mid year. But some investors believe the offer grossly undervalues Zipcar and have launched an investigation to try to scuttle the deal.

Either way, is this a good thing for the 760,000 Zipsters around the world? Yes and no. While Zipcar is the largest car-sharing network, it only operates in the US, Canada, the UK, Austria and Spain. Avis operates worldwide, and should the deal go through, every one of those Zipsters will likely be able to instantly reserve a ride wherever they are in the world. It could also mean that Zipcar could extend its presence to other countries, including Australia.

For Avis, a half billion for Zipcar is a drop in the bucket compared to the $US2.6 billion Hertz spent acquiring Dollar Thrifty last year. Car-sharing services like Zipcar are less convoluted and easier to use than traditional car rental services; reserve online and enjoy the splendour of four wheels for as little or as long as you want at an affordable rate. No need to worry about insurance or filling the beater back up before dropping it off.

And for Zipcar, whose stock has been plummeting for the better part of the last year, they will instantly have access to a larger fleet of cars. And from the sounds of it, Avis isn’t going to mettle too much with the existing system allowing Zipcar to run as a subsidiary. If all holds true, should you need a car at the end or beginning of the month to move, for example, the chances of scoring a van have gone up exponentially. Not to mention your weekend runs to IKEA.

But that will only be true if Avis allows Zipcar to run as is. Jack up the prices and you piss off a huge user base. The process of renting a car is painstaking and you never really know what you’re paying for. What exactly are you opting into? Zipcar made that exact process simple, effortless and easy to understand. Hopefully it stays that way.

Don’t screw this up, Avis.