October 31, 2007

Big news today in the world of car-sharing: Cambridge, Mass.-based Zipcar and Seattle-based Flexcar will merge. The combined company will be called simply Zipcar, and all Flexcar members will be absorbed into the other company's base. The Seattle Post-Intelligencer has more coverage of the merger. I was surprised to see that "neither business is profitable as a whole." While both companies have shown profits in their established markets, they've expanded so much that they're losing money all over. (I still don't know how they expect to make money in Pittsburgh, for example, where the cost of living is low and the population is relatively sparse.)

There's an irritating one-question-per-page FAQ on Zipcar's site to ease the transition. I and other Seattle members should get our cards in February. No word on how much we'll have to pay for usage, but here are some of the highlights:

  • All cities are available to all members. Big advantage to Zipcar here. With Flexcar you had to call and set up an account if you intended to visit another city. Each Flexcar city account had its own plan and its own billing statement -- kind of annoying.
  • Fewer perks: higher membership fee and no gas fill-up bonus. Flexcar waives its $35 membership fee if you drive two times per year. Zipcar will keep that going for just one year, then will start charging everyone its standard annual rate (currently $50 per year) after that. Both Flexcar and Zipcar expect you to refill the gas tank when the level drops below 1/4 tank. Flexcar credits you $2 for doing so. Zipcar does not. Both companies provide you with a gas card so you pay nothing out of pocket.
  • Cooler cars. Until recently Flexcar ran an almost entirely Honda fleet in Seattle: Civics, Civic Hybrids, and Elements. They've recently added Mini Coopers, Subaru Impreza wagons, and a few Scions to the mix. Zipcar's selection runs the gamut. In Boston alone, there's a BMW 328, a Volvo S40, a few Honda Fits, a few Ford Escapes, and various other cars of many makes and sizes. Zipcar also names their cars with whimsical names like "Versa Valedictorian" and "Fit Foulke" (nothing like pandering to the hometown fans) whereas Flexcar uses numbers to identify locations -- and you're not guaranteed any specific make and model of car when you book, only a specific class.
  • No more releasing unused balances. Flexcar lets you reserve a car for a long time, then release the unused balance if you return the car early. If another member takes some of your previously-reserved time, you don't pay for that portion of the reservation. I've tried this numerous times with Flexcar, and nobody's ever picked up the slack time, but it's been a good feature to have in my opinion. Flexcar also lets you cancel a reservation within 1 hour of making it or no sooner than 8 hours before the start time. Zipcar is much stingier: no option to release the unused balance of a reservation, and longer reservations must be cancelled a full day in advance. (Zipcar lets you cancel a reservation of under 8 hours with only 3 hours' notice, though.)
  • Better service? This one's up in the air. Flexcar often feels like a much smaller company than I'd expect. The company caters to hip, tech-savvy users, but talking to their customer service often entails very long hold times and requests to speak with specific individuals. For example, when I wanted to set up an account to book a car in Pittsburgh, they said I'd have to talk to Deborah about that. I appreciate the human touch of dealing with individual people directly, but simple actions often required more callbacks and personal e-mail exchanges than I ever would have expected. Flexcar didn't even offer on-line statements until very recently. I'm hoping that Zipcar will be more customer service tech-savvy and that the lower overhead will reduce their costs.

The competition for the merged Zipcar will be much more broad than I had expected. U-Haul has already started a pilot car-sharing program, and Hertz and Enterprise are exploring hourly rentals. Traditional car rental places charge less for a daily rental, but Zipcar still wins on convenience: book on-line, walk up to car, swipe in, drive, swipe out. As cities keep growing upward and as people pretend to fret about high gas prices, I'm curious to see how car-sharing will change.