Zipcar Getting Zapped
Zipcar, a car-sharing program has been around since 2000 (started with only 2 cars). Members can drive cars by the day or the hour, gas and insurance included.
Enter $4 gas. Suddenly the business model goes haywire. Zipcar’s price increases haven’t kept up with inflation.
Why, then, hasn’t Zipcar raised its prices? Several reasons. First, Zipcar’s users aren’t tremendous gas guzzlers. Seventy-five percent of Zipsters take the car out on an hourly basis (at usually between $6 and $10 per hour). Those drivers probably aren’t re-enacting the Lewis and Clark expedition, so their gas costs, no matter the price per gallon at the pump, are small. These are high-revenue, low-cost travelers.
Also, the spike in gas prices has been a double-edged sword for the company—it’s hurting their margins, but it’s attracting thousands of new customers. The company is growing at three times the rate it was at this time last year, according to COO Mark Norman. It’s averaging 10,000 new customers a month, which is a hefty 4 percent to 5 percent increase for a company with 225,000 total members.
More customers also means a more efficient use of its fleet. Ideally, having an extra few hundred Zipcar users in a metro area means that more of those high-revenue, low-cost riders can take out a car.
Zipcar’s idea was ahead of its time (often ideas get punished for that), and didn’t make a profit when gas prices were lower. Can it survive with membership finally reaching critical mass, but evil gas pricing out of control?
Sure do hope so!! I could definitely see a Fuel Price Protection program working for them.

Most of us have been worrying about the high cost of putting gas into the tank, but have we forgotten to worry about keeping it in there until our engine needs it?