Wednesday, August 22, 2007

Markets in Everything: Car Rental By the Hour

From today's Wall Street Journal, "Zipcar Goes to College":

Companies such as Zipcar Inc. and Revolution LLC's Flexcar -- which allow customers to rent cars for hours or days -- see a lucrative new market in students, a population that has been largely ignored by traditional rental-car companies.

The car-sharing companies are cutting partnerships with schools nationwide: Flexcar is set to announce deals with Arizona State University and the University of Wisconsin-Milwaukee, and this month it added Ohio State University, the nation's largest school by enrollment last year. Zipcar, the world's largest car-sharing company, says it is launching at between 10 and 15 new schools this fall, including Yale University and Carnegie Mellon University, bringing its total to more than 40.

Universities are adding the programs in the hopes they will help reduce the number of privately owned cars -- and ease the resulting parking crunch -- on campus.

The cost to the customer includes an hourly usage rate, which is typically around $5 to $10, and an annual membership fee, which usually ranges from $25 to $35. Gas, insurance and an allotment of free miles per day -- 180 at Zipcar, 150 at Flexcar plus 20 with each additional paid hour -- are included. Cars belonging to the programs are typically situated in university-provided parking spaces on campus.

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