Can Zip Car Survive?
Hertz said: “not profitable,” can Zip Car survive?
Late this past summer, Hertz 24/7 (or Hertz Connect, Hertz on Demand whatever you wanted to call that #FAIL) ceased their “car-sharing” service (euphemism for “car rental”).
So that left Zip Car, the only other hourly car rental car sharing service left to pick up where they originally started here in Hoboken. They also paid a hefty sum to “advertise” on those redonkulous disease-infected bike sharing contraptions.
But if Hertz said “zilch ROI,” then what is Zip doing differently?
Sure, Hertz may have been inept at their rollout of these stupid cars. For one, being in Hoboken was a moronic idea, despite the fire-sale price they paid for each (stolen from residents) parking “spot.”
Having three different names in five years does not help build a brand, that’s for sure. That’s what happens when you have a caffeine-addicted knee-jerk management style. Look around and think before you make a decision you dopes!
And it’s equally likely they just had totally shoddy assessment of the whole market. But that doesn’t necessarily mean the market is (actually) there. Long term, at least.
Zip Car steps up marketing big time
Not sure if you’ve noticed – but many online videos you might watch (YouTube) have countless Zip Car ads in the past couple weeks. Which means they’re spending millions of dollars to “get the word out.”
That raises flags right away, doesn’t it?
With essentially NO competition – why would you need to increase exposure? You practically have a monopoly! (With the exception of “apps” like Uber – which is even easier and cheaper than Zip Car).
I have my doubts.
Things look good for Zip Car (at the moment)
The major hurdles for “car sharing” services like Zip Car (in my mind) are:
- Insurance costs
- Adoption rate
- City parking space costs
- Fuel costs
With gas prices at epic lows at the moment – that gives any business that relies on fuel a breather. But what happens if this suddenly changes? What do they do?
Keep rates the same and suffer? Raise rates and lose customers? Seems like a tricky conundrum to be in.
I’m not privy to the kind of deal they negotiated with the various insurance companies – or how iron-clad they may be. I’m sure it’s a wild-card if lawyers were involved on both sides.
Car sharing needs to be more widespread to be successful
I get the initial market for these car sharing locations. Dense population. Many non-car owners. Etcetera.
But I’m sure people well outside the demographic areas also might have a need for short trips too. By severely limiting the areas – I think they’re doing themselves a disfavor.
People in rural areas have almost no options for rental cars – except for the horrific daily rentals which are nutso expensive. They’re shooting themselves in both feet by not just aggressively expanding full-tilt.
By picking the “best of the so-called litter” by only locating in “optimal demographic areas” is a mistake. And I think I can blame that on “data modeling” and “risk assessment.” They’re missing out on so many customers. I don’t care what their “test market” results were. They were wrong, in my opinion.
Come to think of it, one other thing these car sharing services are missing – is “group lots” where cars can travel between cities and find dedicated parking spots for themselves. If you drive a Zip Car out of that assigned spot in Hoboken – the parking responsibility in another city (like Jersey City or Edgewater) is yours.
Why can’t the car sharing system copy that stupid “bike sharing” model? Where you can take that vehicle one-way between point A and point B?
I don’t know – but maybe Hertz just fumbled, and there is lots of money to be made on car-sharing. Zip Car is still here, which is testament to their viability. Plus, they padded mayor Don Zimmer’s coffers with lots of Shekels!
Side Note – are they other reasons behind why Hertz exited?
Hertz has been a corporation for nearly 100 years. Maybe some of their “old school” marketing techniques that “worked in the past,” just failed in their adoption of “car-sharing?” Is this one of those “they didn’t get with the times“ moments? Are they just a “dinosaur” in the modern digital world?
Or were the profits still there – but just not good enough to keep “key investors” happy since they’re publicly traded? (Zip is owned by Avis now which is publicly traded).
I don’t know – something doesn’t seem right. I cannot imagine the cost differences between the two companies. Unless ZipCar isn’t telling us something – and this will be just another “fad” that is short-lived?