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”).

They cited “low return on investment.”

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.

P1140558 - Can Zip Car Survive?

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.

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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.

P1140546 - Can Zip Car Survive?

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?

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Friday, October 9, 2015 2:43 am

Owning a car is so much more than just having a mode of transportation.

The entitled attitude I see around me is terrible! The expectations and the phrases “They need to” do this and that…

Please don’t get me started on how bad it is really getting.

Monday, October 5, 2015 2:20 pm

I am not certain that Hertz left. It is my understanding that they remained in Hoboken after their initial contract expired. It is also my understanding that they did not submit a reply to the City’s RFP (request for proposal). It is also possible that they did not know that proposals were being submitted. I think it is more accurate to say they were kicked out not that they left. The reason for replacing Hertz was that Zip car was willing to make a $100k donation to the bike sharing program. If Zip car got the contact in exchange for making the donation to the bike sharing program is the donation actually a kickback?

Tuesday, September 29, 2015 1:04 pm

Also- reading onward you state that Uber is “easier and cheaper than zipcar”. Sure, maybe at times when I am just running around the Hoboken/JC area- I can Uber to target, spend as much time as I wan there, then Uber back. OF course that will be easier AND cheaper than renting a zipcar. But what about ALL the other times when people need to go further away than the next town over? What about when someone has a last minute doctor appointment? I got appendicitis 2 years ago and my bf and I got a convenient corner car right away at 730 at night and used it to get to the hospital. Oh, you want to go visit a friend for a few hours that doesn’t live near a train station on a Sunday? You can’t Uber there. that’s right, hourly car rental. Broaden your way of thinking.

Reply to  moondancer69
Wednesday, September 30, 2015 2:23 am

moondancer sounds like a victim. You can’t have your own mode of transportation? You’re sick (doctors) a compulsive consumer (target), and you’re a beggar (need to get somewhere!)

Save your money, buy a decent used car and be 100% self-reliant. I guess you’re well under 30 years old.

Reply to  Frankie
Friday, October 2, 2015 12:10 am

Owning a car is no sign of anything anymore other than you can, don’t be absurd. About half us could give up cars and be fine in this area with things like zipcar and uber, not to mention *gasp* public transit. The real issue here in Hoboken is that there is such rapidly increasing wealth in the recent crop of residents that they can have a car as a rounding error in their expenses, even if not needed. Just look in the garages, they are filled with very fancy cars that never leave their spaces. To each his own, but that is not really a sign of self reliance or another other than wealth.

Tuesday, September 29, 2015 12:59 pm

you say “… rollout of these stupid cars. For one, being in Hoboken was a moronic idea,…”. They weren’t stupid cars and it wasn’t a moronic idea at all. Hertz cars were more convenient than zip cars. For the simpla fact that they were ever so slightly cheaper, and also on the corner. I didn’t have to go into a parking garage to rent one. I could just show up at the corner, and go.
Hertz 24/7 was a spectacular and completely useful idea coming to Hoboken for myself, and a ton of others like myself who don’t own cars. I used it on the whim to go to my dr appointment down in Linden, to go to Target, and for big shopping trips. I don’t know how you get off saying it was moronic and these cars were stupid- I know at least 15 people that used these cars on a regular basis.

Monday, September 28, 2015 6:00 pm

Enterprise has a car sharing service in Hoboken. Cars are available 24/7 and parked at a few garages in town (112 River, 333 River). I haven’t tried it yet, but lower annual fee (free for the first year) and no monthly fees.

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