Zipcar Takes on Uber With New One-Way Rental Service

Moneybox
A blog about business and economics.
May 2 2014 1:21 PM

Zipcar Takes on Uber With New One-Way Rental Service

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Zipcar One>Way will let you travel from Point A to Point B.

Photo by Tim Sloan/AFP/Getty Images

Zipcar markets itself as a “smarter way” to get around the city, an alternative to traditional rental car companies. But for a long time there’s been something, well, dumb about the company’s model: You can book only a roundtrip ride. If you want to go from Point A to Point B and back to Point A again, then maybe Zipcar is for you. If you hate Point A and would never go back there again even if someone paid you $1 million, chances are Zipcar is not the smartest choice.

Zipcar has finally decided to address this flaw, announcing on Friday morning that it will offer one-way trips starting this fall. The service will roll out in September across Boston, the site of the company's headquarters and a city stocked with more than 500 Zipcar locations and 1,000 vehicles. Drivers will select their end destination when they book, guaranteeing a parking spot and taking that space off the grid for other Zipcar users.

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Lindsay Wester, a spokeswoman for Zipcar, declined to comment on how the company will price its new service, Zipcar One>Way, saying those decisions are still pending. Zipcar charges $6 a month or $60 a year up front for a membership, and an additional $8 to $10 per hour for roundtrip rides. Car2Go, a competing car-sharing service that does offer one-way trips, charges about $0.40 per minute or $14 per hour, depending on the city.

What’s most interesting about Zipcar One>Way is that users won't be able to book trips very far in advance, with a maximum lead time of 30 minutes on reservations. Wester describes the service as for “spontaneous use.” The implication is that Zipcar wants One>Way to compete with taxis and car services like Uber that cater to last-minute transportation needs. With One>Way, Zipcar could become an alternative car-rental and alternative cab service (the main difference being that Zipcar users do the driving themselves).

As with bikeshare services, the big challenge for Zipcar One>Way will be distribution. In New York, Citi Bike relies on trucks and “bike trailers” to haul bikes from one station to another based on demand. Transporting cars would, for obvious reasons, be much more difficult. Wester says the booking process will partly address this problem, as users will only be able to choose destinations that have open parking. Since you can only book 30 minutes in advance, wait times in theory wouldn’t pile up, but you might be out of luck trying to get a car home during rush hour.

Alison Griswold is a Slate staff writer covering business and economics.

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