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Zipcar Expanding in the U.S. and U.K.

Richard Levangie | Wednesday November 24th, 2010 | 0 Comments

Zipcar has certainly been busy, zipping this way and that as the company expands dramatically. Earlier this month, Zipcar announced expanded services to another 31 college and university campuses in the U.S, bringing its presence to more than 225 institutions in total. That gives the company a potential reach of 1.7 million students and staff.

Car clubs, or car sharing, is a valuable service on several levels, the most obvious being that people who use car clubs don’t buy cars, and usually avail themselves of more environmentally-friendly modes of transportation, including public transit, bikes, and walking. That also takes a load off transportation infrastructure, and usually leaves consumers with more money in their pockets.

“This fall, Zipcar has gone back to school in a big way,” said Zipcar Chairman and CEO, Scott Griffith.  “We are expanding at a rapid pace because students, faculty and staff value a transportation alternative that is smart, cost effective and environmentally-friendly.  Expanding the university offering is a key part of our growth strategy as well.  Our college members can continue on as Zipsters after they graduate and move to a city that we serve.”

But Zipcar isn’t only expanding on his side of the pond. Earlier this year, Zipcar, the second largest car club in London, acquired Streetcar, its larger competitor. The deal raised red flags in the UK, so it was sent to the Competition Commission, which reviewed the matter, and just gave conditional approval for the merger. At first blush, it seems an odd decision, since the combined companies will have cornered a sizable chunk of the market in the UK capital.

The UK’s Competition Commission (CC) confirmed that it believes that Zipcar’s purchase of Streetcar is not anti-competitive because new and expanding car-share companies are likely to provide increasing competition in the coming years, since it’s expected to be a serious growth industry. This decision, however is provisional, and a final recommendation will be made in January after consultation with all stakeholders.

“This is a carefully weighed decision but the evidence we have seen of credible expansion by existing players and plans by new entrants into this market means that we have provisionally concluded that the right answer in this case is to clear the merger,” said chairman of the Zipcar/Streetcar inquiry group Peter Davis. “Industry estimates have car club membership numbers increasing eight-fold over the next decade so this is a fast-growing and therefore potentially attractive market for new and expanding providers, particularly in London.”

Using London as its beachhead,  Zipcar is said to be looking at the continent for further expansion. We’ll certain be keeping an eye out.


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