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Enterprise Acquires Chicago Car Sharing Service IGO

Leon Kaye | Wednesday May 29th, 2013 | 0 Comments
Enterprise, Enterprise Carsharing, IGO, Chicago, IGO carsharing, car sharing, carsharing, collaborative consumption, urbanization, mobility, Leon Kaye, sharing economy, rise of the sharing economy,

Why car rental companies salivate at the thought of buying services such as IGO

On Tuesday, May 28, Enterprise Holdings announced it had acquired Chicago-based IGO CarSharing. The $15.4 billion company, which also owns the car rental services Alamo and National, purchased the decade-old nonprofit under terms not disclosed to the public.

To some observers, the acquisition is a curious one for Enterprise: despite recent purchases of car sharing services in Boston, New York and Philadelphia, the company’s own head of corporate sustainability was dismissive of car sharing in an article posted earlier this year on TriplePundit. Lee Broughton referenced a study touting the advantages of car sharing and proclaimed car rental services had already offered consumers similar benefits. Meanwhile, car rental companies in recent years claim they are becoming more “sustainable.” So what changed?

According to a press release, Enterprise’s purchase of IGO “marks a great opportunity to reinforce car-sharing best practices with the world’s largest local car-rental and car-sharing network.” In plain English, car rental companies simply cannot ignore the change in consumer behavior that has resulted in the surging popularity of car sharing services. Stubborn demographic trends alone will bolster the popularity of services such as Zipcar, Uber and RelayRides: Teenagers are delaying driver’s education while urbanization has resulted in more people moving back to cities. Whether the reasons lie in economics or lifestyle choices, more city residents eschew the costs and hassle of owning a car in favor of simply snagging one within their neighborhood for a few hours–whether they are company-owned or belong to one of their neighbors or Facebook friends.

And, of course, car sharing services have endured plenty of growing pains, like issues of liability and insurance coverage. Nevertheless, car sharing offers an economical and more seamless alternative to car rental services–especially in congested neighborhoods. As anyone who has dealt with all the corporate speak, long lines, disengaged employees and irritating offers of an upgrade or up-sell from a small sedan to a monster SUV can testify, car sharing offers ease and a level of trust most car rental companies cannot, or will not, match.

At the same time, car rental companies such as Avis (Zipcar) and Enterprise can boost consumer choice and consistency in quality if they manage their investments in car sharing services wisely. Glance at the map above: services such as IGO are tantalizing to car rental companies who seek to expand their reach. Naturally, many car sharing fans fret over what they view as a corporate takeover of their favorite national and local mobility services. In the long term, they should not worry: if these collaborative consumption services disappear or become a shell of their former selves, new ones will emerge quickly. Car sharing and the rise of the sharing economy overall is here to stay, but is just morphing with the times.

Based in Fresno, California, Leon Kaye is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable BrandsInhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

[Image credit: IGO]


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