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Avis Buys Zipcar In Massive $500M Deal

avis buys zipcar

Avis has become the first car rental company from the old school to embrace more city-friendly, car-share based programs with the massive purchase of Zipcar, a popular service that eats into the traditional rent a car market.

Avis CEO Ronald Nelson spoke to the entirely new direction in temporary car usage the Zipcar purpose represents saying that marrying the two brands affords Avis an opportunity to expand market share in areas where Zipcar previously bested the long standing car-rental model:

“By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs.”

According to Yahoo, the Avis and Zipcar partnership will carry benefits for both brands, each with unique challenges in the car rental space. The site explains:

“Bringing the Avis fleet into play will help Zipcar meet high demand on weekends, Avis said, when most people make a run to the grocery store or run other errands. It will also help Avis compete with Hertz Global Holdings Inc., which has its own car sharing service, Hertz on Demand … Both Zipcar and Hertz on Demand park cars throughout cities and college campuses, which allow renters to avoid waiting in lines at traditional car rental counters.”

Nelson indicated that car sharing represents true growth potential for Avis, and the two businesses differ enough that they won’t threaten one another in the space, the New York Times quotes:

“We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company.”

Avis competitors Hertz and Enterprise have already moved into the car sharing space.

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