Could Big Corporation Muscle In On Local Nonprofit?

Avis rental car company buy HOURCAR rival Zipcar.

Wednesday, a major car rental company announced it was buying the Zipcar car-sharing service. Zipcar serves dozens of metro areas across the country, including Minneapolis, where it competes with local nonprofit HOURCAR. But could this deal threaten HOURCAR with well-funded corporate competition?

Analysts say the Avis Budget Group is trying to muscle in on what's turning out to be the next big thing in car rentals.

"Avis, of course, thinks it’s worth $491 million to enter this market by buying the largest upstart rather than having to build such a business itself," writes Washington Post columnist Steven Pearlstein.

Zipcar was bullish about the deal in its announcement:

Simply put, this is a major win for Zipsters around the world. With the global footprint, backing, and talented leadership of Avis, we're going to step on the gas. We believe that you'll see more Zipcars in more locations (especially during times of peak demand!); that you'll see new service offerings that make Zipcar more flexible and fun for you; and that you'll continue to experience the most advanced and sophisticated technology to keep you zipping along your merry way.

For its part, HOURCAR isnt' too fazed at the prospect of a big corporate competitor.

"In smaller markets like Minneapolis, it's small nonprofits that have the edge," Christopher Bineham told Patch.

Bineham runs HOURCAR for the St. Paul-based nonprofit Neighborhood Energy Connection. He touted what he said was "good name recognition" among locals and a strong fan base that "wants us to succede," on top of the service's 40-some cars scattered around the Twin Cities, including three in Southwest Minneapolis.

At least locally, the car-sharing market seems to be growing—Bineham said HOURCAR plans a major expansion that will hopefully double their membership to 3,000 or 4,000 in the next 18 months, and add about thirty cars to their fleet. Most new customers, he said, would likely come from neighborhoods with good public transit access.

"We want to build a network that serves the most number of people in Minneapolis and St. Paul, not just in the most profitable neighborhoods," he said.


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