Enthused by the strong demand and popularity of San Francisco’s pilot Zipvan service launched in late November, Zipcar (NYSE:ZIP) will now roll out its van rental services in Boston and Washington, D.C. After giving stiff competition to car rentals like Hertz, Avis and Enterprise, the car sharing network Zipcar is now challenging truck rental services like U-Haul by through its van rental services, using hearty Ford (NYSE:F) E-150 cargo trucks, in addition to its regular car sharing service. It is likely to launch the service in more U.S. and Canadian markets during the year. Zipcar has over 673,000 members who use approximately 9,000 of its vehicles.
The Zipvan Offering
Starting this week, both Boston and Washington, D.C. will begin offering the Zipvan service, starting with 15 Zipvans each, apart from San Francisco that will now offer 20 vans. Zipvan service is modeled on similar successful van service in Zipcar’s UK operations, previously known as Streetvan (part of Streetcar, a company Zipcar acquired in 2010) that has seen strong adoption and utilization over the last three years. The self-service Zipvan model offers full size Ford E-150 cargo vans to allow consumers to transport bulky personal items, students to relocate in and out of dorms and business transportation needs too bulky for cars or pickup trucks.
Zipvans are available for reservation for hourly or daily use with rates starting from $15.75/hour and $109/day, which would include gas, insurance, parking, roadside assistance and up to 180 miles of driving per day. Users also seem to appreciate the ease and convenience of Zipcar membership while using Zipvans.
Zipcars enjoys immense popularity among urban and young drivers, who prefer its technology driven services, including those who do not satisfy age requirements for traditional car rentals like young college students. The diversification of Zipcar service to provide Zipvans would also attract 21-23 year old users who have to pay $18 surcharge with other van rental services.
We have a price estimate of $22 for Zipcar, about 50% ahead of the market price.