Go to any college town and many other communities and you will find the Zipcar. What began as a small startup has proliferated. As Uber is to the taxi, Zipcar is to car rentals and car sharing.
This week, the city has announced the further expansion of Zipcar. In a press release, it notes, “In 2010, the City partnered with Zipcar to provide car sharing services to Davis residents. The partnership between the City and Zipcar has proven successful. What began in 2012 with four vehicles at two locations has grown to 15 vehicles at seven different locations, not including those on the UC Davis campus.”
“Car sharing is another successful effort to provide mobility options for Davis residents. Between our bicycling infrastructure, Unitrans bus system, and Zipcar, the option to live in Davis without the financial burden of car ownership is becoming more convenient every year,” said Mayor Robb Davis.
The release notes, “Zipcar’s service is as simple as ‘join, reserve and drive.’ Prospective members can sign up through the Zipcar mobile app and within minutes gain access to all of the Zipcars in Davis, as well as 12,000 vehicles across the globe. Members can reserve a car through the mobile app or online, and cars are available by the hour or the day, on demand or up to a year in advance. Gas and insurance are included.”
The city adds, “Car sharing is good for the environment – each Zipcar removes approximately up to 13 personally owned vehicles from the road – offers an additional mobility option for residents who don’t own a car, and can reduce overall parking demand in a neighborhood, particularly in areas with high concentrations of UC Davis students.”
What many may not remember is that Zipcar’s introduction to Davis was marred by controversy – part of which was simply sloppiness on the part of the city for leaving huge holes in the contract that could have caught the city having to pay huge amounts of money.
Leading the way was Bob Dunning’s complaint that the city paid $74,000 in their contract with Zipcar if the utilization levels did not pan out.
Under the terms of the contract, the city was required to pay a maximum of $18,600 per quarter for use of the 4 vehicles in the Zipcar program. According to the agreement, this amount would be reduced by the amount of revenue received from member usage.
However, it only took the city six months to reach that utilization level. According to city staff in 2011: “As the City exceeded the minimum payment for two consecutive quarters, Zipcar removed the payment requirement for the remainder of the contract. Funds paid to Zipcar to implement this program totaled $8,712, which is significantly lower than the initial estimate of $20,000 per year. Funds for implementation of this program came from subdivision environmental mitigation project funding.”
Zipcar not only succeeded, it turned enough of a profit that the city not only did not have to pay for the service as the initial contract called for, but Zipcar itself started paying the city for the use of its parking spaces.
But that didn’t stop the Enterprise columnist from arguing that the city had “been ‘had’ from the get-go on this one.”
In a 2013 column after Zipcar was bought out for $500 million by Avis, Bob Dunning wrote, “A little background is in order here for those who may have moved to town since the great Zipcar fiasco hit our beloved town … you see, … the city of Davis gave away the store to Massachusetts-based Zipcar a few years back – basically guaranteeing the rent-a-car company a profit, no matter what.”
He wrote, “Never mind that Avis had been here for years serving the public with a smile and never mind that Avis rented cars much more cheaply than Zipcar and didn’t charge customers a ‘membership’ fee before they were allowed to ‘share’ the car with the next customer.”
But what Mr. Dunning and others in this community never understood is that Zipcar ran on an entirely different business model than traditional car rentals. For a car rental, you go to a rental place, put down your credit card and rent the car by the day or the week.
For a car sharing model, you sign up through an app, and that gives you access to any of the Zipcars in town. You can then reserve a car and cars are available by the hour or the day, on demand or up to a year in advance.
Why is this important? More and more students in particular don’t own cars. They don’t need them when they are students at UC Davis. They can get around just fine most of the time by foot, bike or bus.
And it has been a quick developing change. When we first started our court watch program in 2010, most of the interns had cars. Now more than half do not have cars.
Most of the time, it works well not to have a car. But what if you have to go somewhere out of town? What if you have to go shopping for an hour? Rather than having to rent the car for a the whole day at $30 or more plus tax and fees, you can rent a Zipcar by the hour.
Obviously there is demand. The city started with just four Zipcars and now has 15. The city council was forward thinking, and the investors in Zipcar understand the future shifting demand for vehicles. But the naysayers in town – if they had their way, we would have been on the outside looking in.
As I said, go to any college town and you’ll see the Zipcars and spaces for Zipcars. It’s the wave of the future and fortunately we jumped on board.
—David M. Greenwald reporting