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Archive for the ‘clunker’ Category

Zipcar Inc., is presently the world’s largest car-sharing company, but it’s now being challenged by big-time companies such as Hertz Global Holdings Inc.

Hertz Chief Executive Officer Mark Frissora said, “It’s a cool technology. My two sons use Zipcar and they said, ‘Dad, you have to get into this’” and Hertz is set to announce its own sharing service, starting with 1,000 vehicles in New York City, by the end of the year.

Zipcar Inc. was not taken seriously when it first started out and was considered by most to be simply a joke.

It only had one car, and that was a lime-green VW Bug.

Now it boasts over 6,500 cars, will show its first profit in the third quarter, and that during a major recession!

What Is Car Sharing?

Users of the service swipe an access card over a reader in the windshield to unlock a Zipcar through a wireless data link, and the keys are waiting inside, attached by a cord to the dashboard.

The cars can be rented by the hour or day, and the annual fee includes, gasoline and insurance.

The service is presently available in 28 U.S. states; several Canadian provinces, as well as in London, England.

The reservation system tracks where a Zipcar is left by the last user, and is even able to lock out a driver who’s kept the auto past the agreed time.

Reservations, pickups and returns can be handled self-serve through the Internet, or by telephone.

How Much Does It Cost?

Zipcar customers currently pay an annual membership fee of just $50. 00 plus $8.50/hr. which includes 125 miles/day and gasoline.

The number of venture-backed IPOs this year is down around 90% percent from the same period in 2007, but Scott Griffith who is CEO of Zipcar says, “We’re succeeding and we’re growing in a year where flat is the new up. Sales will reach $120 million this year and grow to $1 billion within a decade”.

When Griffith became CEO in 2003 the company had 5,000 members.

It now has over 3000 members and the company licenses its proprietary software to city governments in order to reduce costs.

How Big Is The Potential Market?

According to a report that was commissioned from the Economist Intelligence Unit – 37 million customers and yield $10 billion a year in revenue – and that’s big business!

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Following much debate, Congress has finally completed a cash-for-clunkers deal that will provide vouchers to as many as one million new-car buyers who trade in an old automobile that will be scrapped.

The bill contains no provision requiring the replacement cars to be made in the United States, since import-branded automakers and international groups claimed it would be a violation of the free trade agreements.

Two controversial issues right now, are whether or not the bill will in fact help the environment, and if it will significantly decrease dependence on imported fuels.

Several environmental groups have stated their belief that accelerating the production of new cars, and thereby replacing older models before their time, will actually cause more environmental damage than driving less fuel-efficient older cars would.

Other groups say that far more aggressive mileage figures for new models should have been demanded.

Something which has received little press coverage so far, is that it will be possible to use the vouchers for public transportation.

Under the agreement, a clunker must be getting less than 18 mpg in combined city and highway mileage in order to qualify, and new cars that get 22 mpg or better will qualify for vouchers.

A new car with at least 4 mpg better than the clunker will get you a $3,500 voucher, and if the new car gets 10 mpg higher, it’s good for a $4,500 voucher.

For light-duty pickups and SUVs, the same 18 mpg requirement stands for clunkers, but to receive a $3,500 voucher the new truck or SUV has to get at least 2 mpg more than the clunker, and for a $4,500 voucher, a 5 mpg improvement is required.

New heavy-duty trucks must get at least 15 mpg and have a 1 mpg improvement over the clunker for a $3,500 voucher, and a 2 mpg improvement will qualify it for a $4,500 voucher.

Work trucks and vans won’t have a gas mileage requirement since the majority of them aren’t rated by the EPA, but to qualify for the program the clunker has to be a pre-2002 model year and weigh between 8,500 and 10,000 pounds, and to receive the $3,500 voucher, the new work truck has to be a similar or smaller class of vehicle.
The program was modeled on a similar law in Germany which has been credited with boosting car sales there.