Zipcar Expands Options Amid Pandemic, Auto Rental Agencies Cut Prices

Matt Posky
by Matt Posky

With auto manufacturers, dealerships, and insurance agencies scrambling to find a way to retain customers during a global pandemic, now is the season of trying new things. Insurance companies have begun offering refunds on premiums for certain people who can’t afford to pay (and aren’t driving) during the health crisis. Automakers are offering heavy incentives on just about everything, cutting additional breaks for those left unemployed. Dealers are swapping to digital sales models to avoid as much direct contact with buyers as humanly possible while still making a sale.

But what are ride-sharing companies supposed to do?

Zipcar has a few ideas. With ride-hailing services and taxi cabs being viewed by many as mobile germ carriages, you wouldn’t expect shared vehicles to be in demand. Zipcar is making a few changes in a bid to make it all the more appetizing. Rather than relying on its typical hourly (or daily) price rates, it has expanded its Dedicated Zipcar vehicle program for weekly rentals. But that puts the business up against traditional rental firms, which have slashed their prices to an almost comical degree.

Already active, Automotive News reported that the program grew this week in the 10 cities it already serves while launching in 14 more. “The coronavirus crisis has created new needs for our members, especially essential employees, who rely on our convenient on-demand vehicles in urban locations,” Justin Holmes, Zipcar vice president of marketing and public policy, said in a statement.

From Automotive News:

Standard Zipcar services allow users to book a vehicle by the hour or day. Dedicated Zipcar provides Zipcar members exclusive access to keep the same vehicle Monday through Friday.

Dedicated Zipcar rates vary by city and include a monthly membership fee, based on market and class of vehicle, plus a $0.45-per-mile fee. The monthly membership fee ranges from $199 to $349, according to Zipcar. A parking spot, gas and insurance are included.

While this will presumably make a few city dwellers very happy, anybody who plans on doing a lot of driving during the health crisis may be better served by traditional rentals or actually owning a vehicle. Dedicated Zipcar’s mileage fee, combined with membership rates, could easily become more costly than a dirt-cheap rental from a brick-and-motor agency — most of which have swapped over to business models that attempt to minimize customer contact as much as possible.

Your author is currently quarantined in New York City, where Zipcar charges $349 per month for its expanded services… and the auto garage that stores my sedan has this guy who keeps on coughing. I could just as easily snag a week-long rental from Avis, Enterprise, Budget, Fox, Alamo, or Thrifty for under 25 bucks a day — and they all come with unlimited miles. The best standalone deal witnessed thus far was $12 per day for a month-long rental on a Toyota Corolla (or similar). That manager special would probably end up being something less desirable once I arrived at the facility in my hazmat suit, of course.

Fortunately, pricing is low across the board, with only premium models and some minivans averaging over $30 per day.

That’s pretty much the case in all metropolitan areas, especially if they’re under some form of regional quarantine. Prices are down across North America as demand weakens. This makes traditional rentals the better option for carless urbanites who may not need an automobile for the full month but plan on doing a lot of driving while they have it. Meanwhile, Zipcar would be ideal for those who need to avoid mass transit on a daily basis but don’t intend on racking up the miles. For your truly, the tipping point was about 20 miles per day minus the free gas.

Dedicated Zipcar already exists in Baltimore, Boston, Chicago, Washington, D.C., New York, Philadelphia, Portland, San Francisco, Seattle and Toronto. The company said it will shift its national fleet to better serve those markets while also adding Atlanta, Austin, Dallas, Denver, Detroit, Houston, Los Angeles, Miami, Milwaukee, Minneapolis, Pittsburgh, Providence, Sacramento, and San Diego to the mix.

[Image: Roman Tiraspolsky/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Eggsalad Eggsalad on Apr 11, 2020

    I went by the Thomas and Mack arena a few weeks ago. That's the UNLV basketball and event arena, located very near McCarran airport. The arena's parking lot was jammed full of rental cars that were obviously overflowing from the McCarran rental car center. This city gets something like 90% of its income by hosting visitors. We're effectively closed. Don't know when we might bounce back.

    • See 1 previous
    • Art Vandelay Art Vandelay on Apr 13, 2020

      It is funny...if you dare to ask "Is it actually worth all this?" You will get flamed and lambasted, but those screaming the loudest have absolutely no idea or plan for the aftermath of this. People will suffer greatly, but not the people screaming I guess...that is all someone else's problem.

  • Craiger Craiger on Apr 13, 2020

    You can't put the shale genie back in the bottle. The oil is there and the technology has been invented. We're going to have cheap oil for a long time to come. If an Iranian missile attack on Arabia that knocks out 50% of production capacity barely moves the market, I don't know what will. I invested heavily in various oil industry sub-sectors in early 2014 when it was above $100. I'll be deducting those losses for the rest of my life.

  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.
  • GregLocock Car companies can only really sell cars that people who are new car buyers will pay a profitable price for. As it turns out fewer and fewer new car buyers want sedans. Large sedans can be nice to drive, certainly, but the number of new car buyers (the only ones that matter in this discussion) are prepared to sacrifice steering and handling for more obvious things like passenger and cargo space, or even some attempt at off roading. We know US new car buyers don't really care about handling because they fell for FWD in large cars.
  • Slavuta Why is everybody sweating? Like sedans? - go buy one. Better - 2. Let CRV/RAV rust on the dealer lot. I have 3 sedans on the driveway. My neighbor - 2. Neighbors on each of our other side - 8 SUVs.
  • Theflyersfan With sedans, especially, I wonder how many of those sales are to rental fleets. With the exception of the Civic and Accord, there are still rows of sedans mixed in with the RAV4s at every airport rental lot. I doubt the breakdown in sales is publicly published, so who knows... GM isn't out of the sedan business - Cadillac exists and I can't believe I'm typing this but they are actually decent - and I think they are making a huge mistake, especially if there's an extended oil price hike (cough...Iran...cough) and people want smaller and hybrids. But if one is only tied to the quarterly shareholder reports and not trends and the big picture, bad decisions like this get made.