Zipcar (NYSE:ZIP) recently invested in the first peer-to-peer (P2P) car sharing company targeting college campus communities, Wheelz, acknowledging the potential of P2P sharing in contributing to the expansion of the overall car sharing market. Zipcar has vast experience in operating car-sharing programs in more than 250 college campuses across the U.S., which will be helpful for Wheelz in scaling its business. It will also help Zipcar diversify its offering to tap the growing popularity of P2P business model in the future.
P2P Good Competition
Zipcar has thrown a monkey wrench in the traditional car rental business over the last few years, and it currently serves over 673K members with a fleet of over 9K vehicles. However, the membership-based car-sharing company now faces new competitors from up and coming low-cost, P2P car sharing services like RelayRides, GetAround, Sprideshare and Jolly Wheels.
By investing in smart web interfaces, online marketplace, smartphone apps and car-kits to enable keyless entry, P2P players such as RelayRides and GetAround are making credible attempts to match Zipcar’s accessibility and convenience with the cost advantage of not requiring to purchase or rent a fleet.
Also Expands The Car Sharing Market
Zipcar’s Chairman and CEO, Scott Griffith, acknowledged the potential of P2P model of car-sharing and its significant role in expanding the overall car-sharing market. P2P transforms the biggest expense of leasing or owning the vehicles into a variable cost that is only payable when the car is being rented.
In addition to urban markets, the low cost structure makes it ideal for suburban areas with lower population density and usage demand, expanding the potential market size for car-sharing services. Frost and Sullivan estimates the North American car sharing market to reach $3.3 billion by 2016.
Wheelz, Zipcars And College Campuses
Wheelz is the first peer-to-peer car sharing platform designed specifically to meet the needs of campus communities – connecting students with cars to students who need them. It helps car owners earn extra income when their cars are not in use and allows borrowers car access as per their need. What makes it different from other peer-to-peer car sharing networks is the assurance and reliance of sharing within the campus community.
With vast experience in operating car sharing programs across 250+ college campuses in the U.S., Zipcar can help Wheelz scale its business, and can also help diversify its own offering to tap the growing popularity of P2P business model in the future.