After successful operations in San Francisco, Zipcar (NYSE:ZIP) is now expanding to the South Bay area, launching its services in San Jose, CA. Apart from residents and college students, the car sharing company is eyeing significant opportunity for its business-focused services ‘Zipcar For Business’ in the area that is an important market in the San Francisco Bay Area, home to a large number of big and small businesses.
The membership-based car sharing company currently operates in 16 markets, including Boston, Washington D.C., New York, San Francisco, Los Angeles, Chicago, Toronto and London, along with over 250 university campuses across the U.S. It serves over 673K members with a fleet of over 9K vehicles in North America and Europe. Aside from competing with traditional rental companies and car-sharing services like Connect by Hertz, Enterprise’s WeCar, UHaul’s UCarShare and City Car Share, it also faces competition from new low-cost, peer-to-peer (P2P) car sharing services like RelayRides and GetAround.
Significant Opportunity For Zipcar For Businesses
Zipcar has been operating in San Francisco since 2005, but so far the majority of its 1000 vehicle fleet was located towards the northern peninsula. There is a significant opportunity for Zipcar’s services among the residents, college students and businesses of the South Bay area, of which San Jose is an important city. The expansion will provide users in the region convenient access to Zipcars. The service will launch with 12 vehicles and six locations throughout San Jose.
Given the huge number of businesses, from small start-ups to big businesses operating from the area, there is definitely huge demand potential for Zipcar’s services. To tap these, Zipcar provides business-focused services called “Zipcar For Business” that offer discounts for multiple memberships, reduced traveling and parking costs as well as sustainable transportation solution for these business. Zipcar already has big business accounts from tech-giants like Google, Twitter as well as NextSpace, a downtown workspace for start ups.
We have a price estimate of $22 for Zipcar, about well ahead of the market price.