If you live in a major metropolitan area, you know how much it sucks to drive a car. Parking fees are astronomical, parking tickets are inevitable, and parking stress is debilitating. A handful of companies are profiting from the parking problem — and helping to build cleaner cities in the process.
The business is car-sharing, and it’s another fast-growing convergence of for-profit and for-benefit impulses. Car-sharing is enabled by GPS and remote reservation technologies and offers members a super-convenient option in the urban transportation mix. Plus, car-sharing tends to increase utilization of public transit and, thereby, limit greenhouse gas emissions. And the cost is around $8 an hour or $60 per day, depending on the city.
There are dozens of car-sharing companies out there, but the two largest competitors are Cambridge Massachusetts-based Zipcar and Seattle Washington-based Flexcar.
Zipcar was founded in 2000 and now has a fleet of 3,000 vehicles in 23 cities with more than 100,000 members. Growth has been tremendous and last year the company secured $20 million in debt financing from GE and another $25 million in private equity. They also have some interesting ads.
Flexcar was founded as a public-private joint venture one year earlier than Zipcar, and was acquired in 2005 by Revolution — a VC group that bets on “entrepreneurs who want to change the world.”
Car-sharing is a fast-growing industry that’s changing the way urbanites get around, and has already made some people a lot of money. It’s pretty easy to envision the day when these companies announce their IPO’s. Stay tuned.
