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Cleantech first-quarter 2013 analysis and outlook

Mon, 08 Apr 2013 16:55:57 +0000

The first quarter of cleantech was a mix of good and bad news. Avis’ purchase of Zipcar and Silver Spring Networks’ long-awaited IPO finally occurring were further signs of thawing capital markets and movement in the acquisition space. However, in both situations valuations were lower than hoped, a sign of how investors view cleantech.

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Why Avis just made a big bet on the future of cars as a service

Katie Fehrenbacher — Wed, 02 Jan 2013 18:36:44 +0000

On the morning of Zipcar’s IPO in the spring of 2011 I wrote “the year of car as a service has arrived.” Close to two years later, car rental giant Avis Budget Group announced on Wednesday that it will acquire Zipcar for $500 million in cash. It’s proof of the continued maturation of car sharing as a business — despite the difficult economics of that market — and shows how the old school car rental companies are using technology to increase decentralized distribution and on-demand services for their cars.

But beyond the implications for car sharing as a business, the news is an important indicator of the global and infectious trend of sharing stuff and resources. Airbnb — home sharing — is now looking at a $2.5 billion valuation. With 9 billion people set to live on the planet by 2050, and much of that growth happening in cities, sharing — enabled by IT — will be one of the most important tools to emerge. The companies that are creating massive brands now will be well positioned to capitalize on this future.

The little business that could

Car rental companies are indeed the original champions of cars as a service. Hertz at one point reportedly considered buying Zipcar, but instead launched its own service. Many of the major car rental companies are either testing, or have launched, modest car sharing trials in select cities.

But Avis’ acquisition is one of the largest financial bets to date on the undertapped potential of the more modern version of car sharing. The acquisition price was $12.25 per share, or a 49 percent premium over Zipcar’s stock closing price on Monday.

Zipcar has 760,000 members in 20 metro areas in the U.S., Canada and Europe — but that’s not really all that much considering Zipcar is more than ten years old. Modest estimates project as many as 7.5 million users for car sharing services (not just Zipcar) over the next few years in the U.S. if there are supportive policies in place, and up to 20 million in the maximum case scenario, according to an analysis from RAND Corporation.

The biggest problem for Zipcar was access to capital to help grow its user base. Maintaining and expanding a fleet of cars is expensive. Zipcar only first became profitable at the end of 2011, and its stock price has steadily declined (hovering around $8 most recently) since its IPO in 2011 — back then it had a high of $30 per share.

So in that respect, the Avis acquisition is great news for Zipcar and will provide it with deep pockets. The company will be able to grow more quickly in a sector that has seen increased competition for the rental car companies from new startups with innovative takes on car sharing (like Getaround), and even from some creative auto makers like Daimler.

However, as Felix Salmon points out Zipcar’s brand is really strong with its customers and is a well-liked company. Rental car companies, on the other hand, generally are disliked by their customers for things like inconvenient service, hidden fees and the like. The Avis brand could really taint Zipcar, especially if Avis starts to make Zipcar act like more of an old school rental car company.

Avis needs to just let Zipcar operate its business as it has done and not try to change the brand or the service too much. Avis can also use Zipcar as a model for making its rental car business even more distributed (away from the centralized car rental hubs at airports) and even more on-demand. The backbone of this car as a service model is IT, and Avis is acquiring the leader that invented all those easy to use reservation systems, mobile apps, and key fob locks.

A win for investors

The Zipcar acquisition also shows how some of Zipcar’s early investors made a very long-view bet on the trend of car sharing and mostly won that hand. Zipcar had raised at least $67 million in venture capital funding from Revolution Living, Benchmark Capital, Greylock Partners, Smedvig Capital and Globespan Capital Partners, reports Fortune’s Dan Primack (in his email Term Sheet). Benchmark led an early round of funding back in 2005. Revolution (Steve Case’s firm), Benchmark and Greylock will walk away with $150 million.

It’s one of the better exits for VCs that invested in transforming transportation. Most electric car and biofuel investments have struggled. But car sharing is based on using the web, mobile, computing and wireless tech to manage the on-demand use of cars, and that’s historically a more natural investment for a VC to make.

Still Zipcar returns have taken longer than, say, most web companies. Zipcar is almost 13 years old and went public at 11 years old. The multiple is also not all that high in the VC world.

It’s a sharing world

While Avis might not know it, the rental car company is stepping solidly into the global trend of sharing stuff. Some call this trend collaborative consumption, and others call it the mesh. Examples of these companies include everything from home sharing company Airbnb, to the emergence of co-working spaces, to baby clothes exchange site thredUp.

The easiest and most obviously shareable goods are big expenses that are underutilized and that can be managed with IT. So homes and cars are good examples — most cars sit idly throughout the day. Regular stuff that’s cheap and easy to own aren’t that sticky for sharing (I think the whole tool or neighborhood sharing movement has been over hyped).

The really great thing about car and home sharing is that it also has a sustainability slant. Car sharing reduces car ownership and makes the use of a single car much more efficient. It’s almost like the merger of public transportation and personal cars. Same thing for Airbnb — the more homes and apartments are shared, the fewer new ones get built.

Young, urban people all over the world will be embracing this trend. As cities get more cramped — and as world growth happens in cities — owning a car and finding a place to park it will become harder. Zipcar CEO Scott Griffith told us that it’s the Millennials (18-34 year olds) that will truly embrace car sharing. Millenials think “access is more important than ownership when it comes to transportation and car ownership,” said Griffith.

Betting on the habits of the next-generation of consumers is a pretty good place to be. And Avis — an old school rental car company — just got pretty good access to that new set of customers.

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Notorious ad hijacker spreads to more media, retail sites

Jeff John Roberts — Fri, 19 Oct 2012 18:03:59 +0000

Do publishers have the right to control the ads that appear on their websites? A controversial company doesn’t think so and has been injecting billions of unauthorized ads into websites like AOL, the BBC and the New York Times.

The company, Sambreel Holdings, first made news a year ago for hijacking ads on Google and Facebook. Its aggressive tactics drain revenue from the companies and confuse consumers, many of whom are unaware when Sambreel installs itself on their computer. And now the company is spreading quickly and threatening to cause havoc in the online ad market.

How it works

Sambreel, on the surface, offers programs with names like Page Rage or Drop Down Deals that promise to improve consumers’ web surfing experience by customizing web pages or providing special deals. The real purpose of these programs, however, is to serve as vehicles for injecting adware that replaces publishers’ ads with those served by Sambreel.

The result is that consumers see pages like the ones shown below. In the first example, Sambreel has pushed a premium Louis Vuitton ad further down the New York Times homepage and replaced it with an ad for something called “Pickle.” In the second, a prime CNN ad has been replaced by an ad served by a Sambreel browser extension called BuzzDock (a New York publishing executive showed us the takeover ads in action and supplied the screenshots):

The publishing executive, who did not wish to be identified, said that Sambreel’s activities are rattling the online ad industry. In particular, he said, the injected ads deprive publishers of revenue while also distorting prices. For example, a brand may be pleasantly surprised that a YouTube ad that ordinarily costs $10 a click is now available for $3 (without realizing that Sambreel, not Google, gets the revenue).

New York Times spokesperson, Eileen Murphy, provided the following statement:

“Buzzdock’s adware technology alters the display of nytimes.com pages by inserting advertisements sold by Buzzdock directly onto those pages. Buzzdock collects all of the revenue from these ads; The Times does not see a dime. This is a fundamentally unfair business practice that is predicated on manipulating the user experience of nytimes.com, and we are exploring how best to bring it to an end.”

How widespread?

The publishing executive claims that Sambreel’s activities are serious enough to have depressed his company’s most recent earnings result. But such claims are hard to verify since it’s not possible to tell how many computers contain the ad-serving software. Sambreel did not respond to requests for comment.

At first glance, it seems unlikely that Sambreel is pervasive enough to affect the ad industry. After all, how many people are going to download junky browser plug-ins? On the other hand, Sambreel’s reported use of underhanded tactics could mean it is indeed widespread.

In a lawsuit filed in September, for instance, rental car company Hertz claims that Sambreel is bundling its adware with Pokemon video games, meaning customers are often unaware the software is even there. The Hertz lawsuit, which accuses Sambreel of injecting competing offers right when a customer makes a reservation, cites Sambreel’s own figure that claim more than 20 million “users” and that its ”products generated 158 billion advertising impressions” in the last quarter of 2011.

The allegations that Sambreel uses trickery to invade users’ computers is backed by Ben Edelman, a computer expert at Harvard Business School. Edelman says the adware is coming in through various bundles, including “trinkets” like the programs that promises to let you see “who has viewed you on Facebook.” The end result is the same — the user gets a junky product and adware that makes the computer run slower.

How to stop it?

Sambreel may be disturbing but it’s hardly the first time someone has tried to hijack publishers’ ad revenue. As Edelman points out, it was a decade ago that publishers sued ad nuisance Gator for taking over banner ads (the cases settled out of court).

This time around, people are pointing fingers at not just Sambreel but also at ad exchanges like Rubicon. In general, these exchanges provide a useful service for publishers by finding real-time buyers for unsold ad inventory. But in the case of Sambreel, both Edelman and the publishing source say ad exchanges are turning a blind eye to the company’s unethical practices. Rubicon did not respond to an initial request for comment. (Update: In a Monday email, Rubicon wrote to that it had previously terminated its relationship with Sambreel).

If the exchanges are complicit, they appear to breaching an ethical duty but not a legal one. That means that the publishers may have no choice but to sue Sambreel — which could prove a tall order.

The adware company has already adopted aggressive legal positions, including suing Facebook for antitrust last spring after the social network said it would ban any users who had Sambreel’s Page Rage on their machines. Facebook has moved to dismiss the suit, calling Sambreel a “parasitic free rider.”

Should publishers decide to join Hertz and sue Sambreel directly, they may have to find a creative way to do so. From a legal perspective, Sambreel is likely to argue that users can do what they like with their own computers — including stripping out ads. Hertz is trying to overcome this by invoking New Jersey business and computer security laws.

Ken Basin, an intellectual property attorney with Greenberg Glusker in LA, says publishers can invoke copyright or their terms of service to counter Sambreel. He also suggests that publishers should appeal the federal government to begin privacy inquiries into Sambreel.

(Image by cristovao via Shutterstock)

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Cleantech third-quarter 2012

Mon, 15 Oct 2012 06:55:12 +0000

The third quarter in cleantech brought into focus the successes and challenges of more-mature companies like Tesla, Airbnb, and Zipcar. It also highlighted energy challenges in India and China. This quarter Tesla’s production schedule came under fire, and share economy leaders Airbnb raised cash while Zipcar struggled with its membership model. Meanwhile the Indian power outage in July prompted questions about how the developing economy will power itself. This quarterly wrap-up discusses these milestones and provides a near-term outlook for trends, technologies, and companies to watch in the next 18 to 24 months.

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Opportunities and risks in the share economy

Mon, 10 Sep 2012 06:55:27 +0000

Owning physical items — cars, apartments, office space — has both lost some of its luster and will be increasingly inefficient for a global market. It is shifts like these, combined with catalysts like mobile technology, that are driving a greater interest in the share economy, which can broadly be defined as a marketplace where business models are built around consumers choosing access rather than ownership. Key sectors in the share economy include car sharing, vacation sharing, office sharing, and ride sharing. Each has its own set of companies to watch, as well as its own opportunities and risks.

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Remote work doesn’t have to be glamorous to be effective

Jessica Stillman — Wed, 23 May 2012 13:06:41 +0000

Is remote work only for a select few? What demographic data we have on the phenomenon from the Telework Research Network has found existing telecommuters tend to be older, well paid and highly educated professionals. Meanwhile, a recent study suggested that while remote work boosted productivity on creative tasks, it generally reduced it for boring, rote activities.

These findings could suggest that remote work is best suited for senior-level folks and the highly educated – the designers, programmers and content producers that many of us generally picture when asked to imagine laptop-toting virtual workers. But outsides of cafes in places like San Francisco, there’s a whole other side of the remote work revolution going on, one that’s focused on lower skilled employees like customer service agents who are seeing their place of work move from call centers to home offices and living rooms.

Take Hertz’s “Journey to Home” program as an example. The rental car company originally housed its customer service agents in an Oklahoma City call center, but over the last few years has been transitioning to have nearly half of its agents working out of their homes. Why?

“From a disaster recovery perspective, if you put all your eggs in one basket, especially when that basket sits in the center of the United States where a lot of natural disasters can happen, you put yourself at risk for major interruptions to the business, so we decided that it would be good to have another center of gravity,” Joe Eckroth, Hertz’s CIO, told GigaOM.

Secondarily, he explains, “as you begin to mature a market where you’re already drawing a lot of the workforce, competition starts to rise. In Oklahoma City, a lot more call centers are coming in. Remote work allowed us to broaden the pool of people we could draw from. It’s allowed us to attract students, part-time workers, full-time people who couldn’t necessarily, because of life circumstances, travel every day to go to work.”

What started as a disaster preparedness and recruitment initiative has had plenty of side benefits, according to Eckroth. “It has exceeded our expectations for sure,” he says. “The actual performance results on the sales side and on the customer service side were in all categories as good as we were getting in a tightly managed call center and in I would say about half the metrics they were a little bit better — places like employee satisfaction. Productivity is as high and in some cases higher,” he says, and that’s not even including the sustainability gains from so many saved car trips (and the bonus to employees from not having to buy so much gas at about four dollars a gallon.)

Hertz’s experience shows that less glamorous remote initiatives can work, but Eckroth stresses that success requires careful thought and planning. “We took some of our best and brightest people and we made it their sole mission to make it work,” he says. “It wasn’t a part-time job. It wasn’t something on the side.” Hertz’s experience shows getting highly motivated, highly communicative managers is key, but so is getting the right employees, and they aren’t necessarily the same people who would thrive in a traditional call center.

“Anybody can try to work from home, but it takes a certain set of disciplines. It takes a different mentality for somebody to stay motivated, to be undistracted and succeed at home. If you just took the average guy in the call center and sent them home, there would probably be a fairly high failure rate,” Eckroth says, noting that in fact some of the Oklahoma City call center’s star employees tried remote work and subsequently requested to return “to the box,” as Eckroth refers to it.

To make sure Hertz hires folks with the right combination of a self-starter mentality and basic tech savvy, the company has set up a detailed profile of the kind of person it’s seeking, putting candidates through thorough testing to make sure they have the skills to succeed. “I don’t think we knew how different the hiring profile might be,” Eckroth admits. “We didn’t modify our initial hiring process enough to accommodate that, and so that’s something we learned pretty quickly over the course of the first year or so. We changed our competency model.”

Besides figuring out exactly what you’re looking for in at-home agents and testing stringently to make sure candidates have these qualities, is there any other recommendations Eckroth has for other firms contemplating taking agents out of the box and sending them home? “Benchmark,” Eckroth suggests, noting that more and more firms are taking a remote approach and have wisdom to share. “Go out and talk to some people who have done it and get their lessons learned.”

Also, ensure no one feels like an afterthought. “This is a part of the organization. Treat it as such. Agents at home are every bit as important as the guys sitting in the box. I do a periodic video for all agents in our customer care, but once in a while I will uniquely do it just for the at-home agents with a specific message to them. Call them out and recognize them for some of the unique things they do. They should always know that they’re a part of a thought-out strategy. Pull in some of the really good people. They can come in for a few days or a week and work on special projects. It makes them feel that much more part of the team and not like they’re just a contractor out there. If that mentality builds, you’ll begin to create a second-class citizenship and that can be a disaster.”

Should more companies consider letting their less highly skilled employees skip the drive in to the office and just stay home?

Image courtesy of Flickr user mrkathika.

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Can Hertz shake up car sharing?

Adam Lesser — Tue, 22 May 2012 20:27:03 +0000

This article originally appeared on GigaOM Pro (subscription required):

Good, but not great, growth has Wall Street punishing car sharing market leader Zipcar, which IPO’ed at $18 last year, zoomed to $28 and now sits at around ten bucks. But the question on many people’s minds is: What is Hertz doing?

The argument for Hertz successfully competing with Zipcar goes like this: Hertz doesn’t require an annual membership fee (Zipcar charges $60), has no late fees (Zipcar charges $50 per hour), it allows one way rentals in some locations, and yeah, it already has a massive fleet of diverse cars.

On paper, Hertz getting into the car sharing game doesn’t sound good for Zipcar, even if you believe there is room for multiple players and that this is a market with considerable future growth. There aren’t good market projections for this nascent industry, though a recent analysis from RAND Corporation took a stab at it, suggesting that with improving tech to locate and rent vehicles combined with favorable government policy, the industry could include 7.5 million users, more than ten times where it currently sits.

Hertz’s CEO Mark Frissora made news in March when Bloomberg reported that he had considered buying Zipcar. But confident that he could leverage Hertz’s existing fleet of 375,000 cars and its customer relationships, he ultimately decided to launch Hertz’s own service. Referring to the New York market, Frissora has said Hertz has 35,000 cars there and once they’re all enabled for hourly rental, Zipcar will “have a real problem.”

In 2009, Hertz acquired Paris based car sharing technology developer Eileo, which makes the Zibox that Hertz is relying on to convert its fleet. The Zibox immobilizes the engine and interfaces with the reservation system to allow drivers to enter and start the car. Hertz offers drivers a key fob that acts like an RFID card. In testing it found drivers wanted a key that they could take with them on their key chain that controls entry to the car. Drivers wanted to feel like they were carrying a car key. The actual car key that starts the car is tethered to the car so that customers don’t take it with them when dropping off the car.

How Hertz will do it

I caught up with Jordan Reber, the VP of Hertz On Demand, who is overseeing the global ramp up of Hertz’s hourly rental service. In our discussion about Hertz’s entry into the car sharing market, Reber noted, “It’s what people tend to ignore when they compare us to competitors, it’s the size of our logistics and parent infrastructure. The issue of car sharing is scale. When those cars are tech enabled, we’re able to put them where our customers want them, be it Omaha or New York City.”

And it’s this scaling up that will ultimately prove whether Hertz can be a market leader in car sharing. Zipcar currently has 709,000 members and 9,300 vehicles in the U.S. and Europe. Hertz has been fairly measured in its ramp up so far with 160,000 worldwide members and about 1,100 cars available. On the question of how much of the Hertz fleet would convert to hourly rentals, Hertz’s Public Affairs Manager Paula Rivera would only say that it would occur over the next 12-18 months and that Hertz is “aiming to get a significant amount of the fleet installed with the [Eileo] technology.”

If the ramp up feels slow, it’s partially because Hertz is being very careful not to cannibalize its core car rental business and Reber made a point of saying that internal data shows that 70 percent of Hertz On Demand users use the service for hourly rental or after hours use.

Moreover, if most in the car sharing market view car sharing as a discrete business, Hertz is far more inclined to view it as a potential source of incremental revenue where it can gradually pick off markets like New York where it’s well positioned with a high volume of locations and available cars. There are likely to be regional advantages that flow toward any player with good logistics in a given city.

You also don’t get the sense that Hertz wants to launch whole hog with national campaigns and run into the car sharing space (it has minimal presence in other markets like San Francisco). It’s not as if Zipcar is making money hand over fist right now as it hopes 2012 will be its first year of very modest profitability.

What’s interesting about the figures is that Hertz has racked up 160,000 members worldwide (90,000 in the U.S.) with a fraction of the number of hourly vehicles in circulation as Zipcar. Sure a big reason for this is that joining Hertz On Demand is free, but that doesn’t make it any less real that the company has millions of existing customers to market to, so that it can get RFID enabled key fobs into those hands so they can easily rent a car. Reber added that Hertz is open to enabling cars to be opened with smartphones when he believes near field communication technology and mobile payment systems are more mature.

Whatever the rate of Hertz’s ramp into car sharing, it’s not likely going away as a priority for the company. Reber was frank in saying, “Car sharing is closely controlled and watched by our CEO [Frissora]. It’s a big focus for us here, not because of me but because of our CEO.” At this point it’s just a question for Hertz of incrementally executing in key markets, which should be enough to give Zipcar a minor headache.

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Green IT Q3: Solar stumbles while car sharing zooms ahead

Mon, 10 Oct 2011 07:01:00 +0000

The trials and tribulations of the solar industry dominated the third quarter as warnings about a storm of dangerous market forces in the industry finally reached an outcome with Solyndra’s bankruptcy. But not all was dismal for the cleantech industry during the quarter. Car sharing continues to reduce resource consumption, and much capital flowed to that sector. On the data center side of the industry, Google provided insight into exactly how much energy the tech giant uses, as well as the carbon footprint of its data centers. Companies mentioned in this report include Solyndra, Zipcar, Airbnb and Silver Spring Networks. For a full list of companies, and to read the full report, sign up for a free trial.

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7 Steps Toward Shared Vehicles in 2010

Josie Garthwaite — Mon, 27 Dec 2010 01:00:30 +0000

Whether they run on gasoline, electricity, or even Christmas ‘nog, our own vehicles can take us only so far on the road to cleaner, less congested roads. Fact is we’d be better off with fewer cars on the road, more efficient use of private vehicles (i.e. more carpooling, less solo driving) and more convenient ways to get around via mass transit, walking and cycling.

Widespread access to so-called “mobility as a service,” is a crucial piece of this greener transportation puzzle, making it easier for us to go car-free more frequently. Over the course of 2010, a rich ecosystem of services, startups and innovations began to take shape.

As envisioned by MIT researchers, a fully fleshed-out Mobility on Demand system would involve a comprehensive network of services in which city residents could rent an electric car, scooter or bicycle when and where they need it in order to bridge the “last mile” gap between public transit stations and a final destination.

The effects of sharing bikes and vehicles could extend well beyond the transportation sector. According to a report out this fall from research firm Latitude, car-sharing is kindof like a gateway drug for the growing trend of using the web to help people share physical things. People who try out car-sharing services are more likely to join in other web-based sharing services, and folks who share vehicles share significantly more than non-car-sharers across a range of categories, from living space to food to media. Here’s seven steps taken this year toward shared transportation.

Bike Sharing Boom: Bike sharing networks, in which city residents or tourists can rent bicycles by the hour or day, have been around for years. Paris, with the Velib program it launched back in 2007, helped popularize the idea, but it wasn’t until this year that bike sharing — often enabled by mobile access to the web and GPS — began to gain momentum stateside. Programs launched in Denver, Minneapolis, Washington, D.C., and other metro areas.

New York City is up next, as the Big Apple’s transportation department requested proposals last month to set up a high-tech system for borrowing or renting bikes for short trips, starting around the spring of 2012. Across the pond, London launched a program called Barclays Cycle Hire in July and by November it was set for expansion, having already logged more than 1.5 million journeys and signed up over 100,000 users.

Green Light for AB 1871: In September legislation called AB 1871 passed in California that paves the way for distributed or “peer-to-peer” car sharing programs, which let car owners rent out their personal vehicles. The legislation establishes rules (going into effect January 1, 2011) for when a vehicle owner’s insurance policy stops applying, and when a commercial policy held by a service provider like RelayRides or Spride Share would kick in.

Distributed Car Sharing Revs Up: Following passage of AB 1871, startups including Spride Share, RelayRides and Get Around (which started as a team project at Peter Diamandis and Ray Kurzweil’s Singularity University in Mountain View) have launched services to facilitate distributed car sharing. Big-name investors have put some skin in the game, too. Having launched in the Boston area in the fall, RelayRides expanded to San Francisco this month, and announced its first round of investment from Google Ventures and August Capital.

Zipcar Guns for IPO: The car sharing market fielded its first IPO registrant this year, with Zipcar filing in June to raise up to $75 million in a public offering. Plans for proceeds from the offering include, among other things, repaying more than $40 million in debt, developing new services, expanding its fleet and paying some $5 million to shareholders in the recently acquired Streetcar. Then again, the company raised a $21 million Series G financing round earlier this month, which could mean the IPO is on the rocks.

Streetcar Acquisition: In its latest bid to expand across Europe, car sharing heavyweight Zipcar bought London-based car-sharing firm Streetcar this spring in a deal valued at about $62 million. Zipcar CEO Scott Griffith called the deal (which came on the heels of an investment in Spanish car-sharing startup Avancar late last year) a key step toward making the company a “truly global” car-sharing network.

UK antitrust authorities halted integration of the two companies while they looked into whether “the transaction may result in a substantial lessening of competition in any relevant market in the United Kingdom,” but ultimately approved the transaction this week.

Big Auto Starts Sharing: With the launch of a pilot project that will let customers rent any current BMW model by the hour from the company’s event center in Munich, BMW Group broke into car sharing this fall. It wasn’t the only example of a big auto company moving into Zipcar’s turf in 2010. Daimler expanded its two-way city car sharing program Car2Go (pick up a Smart Fortwo in the Car2Go fleet, drop it off at any open parking spot in the program area).

Daimler also launched the Twitter of ridesharing, Car2Gether, which identifies and links passengers and drivers with empty seats that are nearby and heading in the same direction. What’s a German car company doing getting into social networking and tech-enabled carpooling? Trying to figure out new business models for an era of accelerating urbanization, declining car ownership and expanding access to the mobile web.

Hertz Snaps Up Flexicar: In October, rental car giant Hertz announced an agreement to acquire Australia’s largest car sharing provider, Flexicar. Already making inroads with car sharing in Berlin, London, Madrid, New York and Paris, Hertz added Melbourne and Sydney to its Connect by Hertz footprint with this deal. The companies planned to integrate Flexicar’s 2,500 members into Connect by Hertz shortly after closing the deal (expected this month).

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Hertz Moves to Dominate Car-Sharing Market

Amy Westervelt — Tue, 09 Dec 2008 13:00:58 +0000

Following in the footsteps of U-Haul and Enterprise, Hertz rental cars is rolling out its car-sharing program in December, starting with New York, London and Paris. Unlike Enterprise or U-Haul, though, Hertz will be going after consumers.

“Hertz’s car sharing is located in city environments and is available directly to consumers. In addition, it is going after B2B business as well as B2C, government and universities,” says Paula Rivera, a spokeswoman for the company.

Called Connect by Hertz, the Hertz car-sharing service will mimic existing car-sharing services by providing access to cars in lots throughout cities as opposed to merely offering the service through its existing rental lots. “We’re starting out in neighborhood parking locations, specifically parking garages and on-street parking areas,” Rivera says.

In an effort to best competitors, the company will also provide GPS, iPod connectivity, and generally lower rates — $1 per hour less than Zipcar, on average, according to Rivera. Hertz has also pledged to offer only vehicles that are EPA SmartWay certified, meaning they’ve earned a score of 6 or more (out of 10) on both the Air Pollution and Greenhouse Gas scores, with a combined score of at least 13. At its European locations, Connect by Hertz will only offer cars that outperform the current EU standards for auto emissions (130 grams per kilometer).

Though starting out in just three cities, Hertz plans to expand its car-sharing service quickly in 2009. “We have aggressive plans for expansion and are keeping all of our options open,” Rivera says.

Could part of those aggressive plans include buying out, say, Zipcar? Rivera is “unable to comment,” but it would seem like a smart move for both parties, given that Hertz needs lots and Zipcar’s dreams of a successful IPO may be dwindling in the current economic climate.

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