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.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Opportunities and risks in the share economy
• Cleantech third-quarter 2012
• How to leverage the web-sharing economy now

The deal, which is expected to close in Spring 2013, allows Avis to get into the growing car-sharing market and gives Zipcar a big backer, which can help it grow and make it more efficient. Avis said it can achieve annual cost savings of $50 to $70 million for Zipcar by relying on its expertise in fleet procurement, operations and maintenance as well by increasing fleet utilization between the two companies.

For example, Avis can provide extra cars to Zipcar on the weekends when supply is constrained. Avis said it expects the deal will be accretive by the second year. Zipcar will also be able to offer more deals and open up new locations as part of the acquisition, said Zipcar Chairman and CEO Scott Griffith.

“By combining Zipcar’s expertise in on-demand mobility with Avis Budget Group’s expertise in global fleet operations and vast global network, we will be able to accelerate the revolution we began in personal mobility,” Griffith said in a statement.

Zipcar is the leader in the car-sharing market with more than 760,000 members in 20 major metropolitan areas in the United States, Canada and Europe. It will operate as a subsidiary of Avis Budget Group, with Griffith and Mark Norman, president and chief operating officer set to continue leading the company.

Ronald L. Nelson, Avis Budget Group chairman and CEO said car-sharing represents a big growth opportunity for Avis and is complementary to traditional car rentals. He said he wants to continue the Zipcar brand but will utilize Zipcar’s technology to offer more options under the Avis and Budget brands. Avis in 2011 launched Avis on Location, a corporate car-rental service that allowed enterprise clients rent by the hour. The Zipcar deal is a big bet by Avis, which will use most of its $554 million in cash and securities to buy Zipcar, which also has $82 million in cash and securities.

Zipcar debuted in 2000 in Cambridge, Mass., and grew through acquisitions and mergers including a deal with Flexcar in 2007. More recently, it has expanded in Europe through the acquisitions of Streetcar in the U.K. and Carsharing.at in Austria. It has also taken a majority stake in Barcelona-based Avancar. The company went public in 2011 and hit a market value of $1.2 billion after its stock price zoomed to $30 a share. But the stock price has steadily declined since and has hovered at less than $10 a share since August. The company, however, was looking ahead to brighter days after its third-quarter earnings report in November, when Griffith said Zipcar was on track to have its first year of profitability in fiscal 2012. The deal comes as Zipcar faces more competition from car sharing startups such as GetAround and RelayRides.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech third-quarter 2012
• Opportunities and risks in the share economy
• Ups and downs for cleantech in Q1

The company and idea were created by David Friedberg — also the founder and CEO of The Climate Corporation — and Steve Pretre, who will lead the startup as its CEO. Friedberg brought in Climate Corp’s investors (as well as Climate Corp itself) to back MetroMile, and the company has already raised $4 million from NEA, Index Ventures, First Round Capital, and SV Angel, in addition to Climate Corp.

Customers using MetroMile’s new service — which is only available in Oregon because it needs state approval — place a device called the Metronome into their car’s onboard diagnostic car port, called the OBD-II. You might have never noticed it, but the OBD-II is standard port on all cars built after 1996, and has to be accessible in the front dashboard within three feet of the driver. The port is one of the ways that car data is being unlocked for third party developers (see my GigaOM Pro report, subscription required).

After the Metronome is plugged in, it accesses all the car computer’s data, and specifically collects (for this initial product) information about how much the customer is driving. The cellular connection in the Metronome enables MetroMile to process the data in the cloud, and the Metronome also has GPS to track distance. I was wondering if a cell phone app would have the brains to do this just as easily (and clearly more cheaply), and Friedberg told me in an interview that they need the data to be collected by a device to avoid fraud and ensure accountability.

Once MetroMile has the driving data, it can charge its customer only for how much — or how little — they’ve driven per month. Drivers who only occasionally use their car — say for weekend trips — would pay much lower rates than a person who commutes in their car an hour every day, each way.

While the idea sounds boringly simple, it’s meant to target a specific set of drivers that doesn’t drive all that much and who for years have been subsidizing those drivers that do drive a lot through traditional car insurance programs. Most of the accidents are done by drivers that drive a lot, says Friedberg. This new type of low mileage demographic tends to be young, urban, environmentally conscious, and maybe even a member of car sharing groups like Zipcar.

That target demographic is alive and well in MetroMile’s initial city, Portland, where the dream of the 90′s are also alive, and everything has a bird on it. MetroMile said it can offer this type of driver insurance for 20 to 50 percent less cost than traditional insurance, with equal or even superior coverage. Friedberg told me that MetroMile has discussed its insurance products with car sharing companies, but that the company is really targeting car owners, as car sharing drivers are still a small slice of the population.

MetroMile also shows the customer their driving data through an online dashboard. Down the road, MetroMile could offer other types of services using car data. I could envision a service that gives recommendations for how to cut down on driving (to save fuel costs), in the same way that Opower provides recommendations for lowering energy consumption.

In that way, MetroMile, like the Climate Corporation, could have a planet-friendly slant. Once car drivers know more data about their own driving habits, their likely inclined to drive their car more efficiently.

The traditional insurance companies are also looking at using devices and data to create new products, and the New York Times had an interesting article on this trend this weekend. Friedberg says that standard insurance companies won’t readily accept pay-per-mile insurance rates because then they would be forced to raise rates on the drivers that drive a lot more, to cover the lower mileage drivers; drivers that face higher rates then would just defect to competitors, said Friedberg. Car drivers are also wary of what types of data the car insurance companies are collecting with these new devices, and also how the insurance companies would use such data.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Ups and downs for cleantech in Q1
• What the utility of the future looks like
• Cleantech, meet connectivity: a new era of energy efficiency

Fresh on the heels of its big $55 million round of fundraising, Calxeda has announced that it’s 64-bit chip will be in the market by 2014. It’s current chip is called EnergyCore is only 32-bit. — GigaOM Pro blog.

Amazon’s data center efficiency VP James Hamilton gave a talk recently at the First Round Capital CTO Summit in which he explained to budding entrepreneurs how he would approach providing value to the modern data center. — GigaOM Pro blog.

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. — GigaOM Pro report (subscription required).

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. — Opportunities and Risks in the Share Economy: GigaOM Pro Report (subscription required).

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech third-quarter 2012
• Opportunities and risks in the share economy
• Ups and downs for cleantech in Q1

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• After Solyndra: analyzing the solar industry
• Cleantech and investment in 2013
• Electric vehicle outlook: 2012–2017

Up until this point, Scoot Networks’ hundreds of beta testers have been quietly using (and paying for) the service to get between locations in San Francisco, but if you weren’t part of the beta testers you couldn’t get access to them. I spotted a few of the Scoots from time to time throughout the city over the past couple of months, like outside of the Caltrain station on 4th Street. But now anyone can sign up for it.

Scoot Networks co-founder Michael Keating told me in an interview last week that they decided to open up the public launch early to help the company continue to test out the model. Bringing in more users means they can more quickly refine the service for the best user experience. Through its beta testing, Scoot Networks has already honed pricing, options and locations of the Scoots.

Right now to use Scoot’s network it costs $10 to sign up, $5 per month, and $5 per hour. There’s also a $10 per day option (that seems like a steal), and a $25 per month package that includes four half day rides. Additionally there’s an option to rent out your own personal Scoot for $185 per month.

Using a Scoot electric scooter will be a completely different experience than using a Zipcar car. Scoot users will want to use the scooters to ride short trips around the city — a coffee meeting at Sightglass, or stopping by the farmers market at the Ferry Building during your lunch hour — particularly places where parking is difficult.

Commuting could be the killer app for Scoot. Keating told me that he was surprised that so many people wanted to use the Scoots for the last mile of the commute, like between the train station and their house. “Commuting is more of a pain then people realize,” said Keating.

The scooters aren’t meant for highway use or long distance rides. The have a top speed of around 30 miles per hour, and you don’t need a motorcycle license to drive one. The battery only lasts around 20 to 30 miles. The scooters were made in China, and are a premium version of a common type used there.

Some of the hurdles the service will have to overcome include: getting people who haven’t driven a scooter before to feel comfortable signing up and driving one (they provide tutorials), and getting enough parking spots with the needed plugs to charge the batteries. But San Francisco, with all of its new alternative transportation modes, will be the place to figure it out. Scoot Networks wants to expand out of San Francisco after it’s got a few thousand scooters in San Francisco.

Scoot raised a $550,000 seed round this year and will be looking to raise a series A round next year. The company has 5 full time employees.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech third-quarter 2012
• Opportunities and risks in the share economy
• Ups and downs for cleantech in Q1

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Connected world: the consumer technology revolution
• Green IT Q3: Solar stumbles while car sharing zooms ahead
• Cleantech, meet connectivity: a new era of energy efficiency

The emerging sector is called a variety of things like peer to peer car sharing, car sharing 2.o, or neighborhood car sharing, and there’s a half dozen companies who have emerged to try to develop businesses based on this idea. Despite that the market is so new, and the hurdles are somewhat high, many of the companies in this sector have very high profile investors.

Relay Rides, another of these companies, raised money from the venture arms of Google and auto giant GM, as well as August Capital. Wheelz, another competitor, has raised money from traditional car sharing company Zipcar. Clearly forward-focused investors are intrigued with the idea, but is there a solid business model here? If so, it still needs to be worked out.

The business model needs to provide a cut for the car owner, for the insurance, for the initial tech installation or device, and for the cost to acquire users. I go more into the economics of peer to peer car sharing in this GigaOM Pro report (subscription required). Zipcar’s CEO Scott Griffith told me recently he thought peer to peer car sharing is a particularly hard business because of the revenue sharing with the car owner.

The industry hasn’t been without its growing pains. Relay Rides has pivoted a bit, and no longer installs its own in-car connected systems in the vehicles in its network. The company’s original model was to have its staff install the connected devices in the vehicles, which took money and time. Now Relay Rides is relying on its partnership with GM, and Onstar, to supply the vehicle connectivity and control system. And yes, the GM deal was a big win for the firm.

RelayRides also experimented with whether or not it should offer gas cards, and how to cover the cost of gas for very short trips. It’s not necessarily obvious how to set up a system like this, as the only precursor is traditional car sharing like Zipcar, where the company owns the cars and is responsible for their upkeep and gas bills. Both Relay Rides and Getaround have invested in substantial marketing, at least in San Francisco, one of their test markets.

Getaround sells connected kits for cars, which is a less capital intensive way of having the connected device system installed in the cars. But when I’ve talked to some potential investors, and yes competitors, they wonder how secure these systems are.

Safety and security are huge issues for this emerging industry. A company called HiGear, which created a business like this based on luxury cars, was the target of thieves and had to shut down. A startup called Spride Share, developed by investor Sunil Paul, never launched because of the concerns over insurance and the business model. Questions also remain about liability and insurance, which Relay Rides faced in a recent tragic event.

Peer to peer car sharing is an inspiring idea, and one that uses cars more efficiently, which is why some of these top notch investors have supported these startups. But the business models for these companies still needs to be worked out.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The economics of peer-to-peer car sharing
• Opportunities and risks in the share economy
• What the share economy can learn from the cloud

RelayRides — which raised money from GM’s venture arm — says it is the first third party to use OnStar’s API, and later this Summer GM plans to open up the API to other third party developers, too. OnStar uses satellite-connected on-board units to offer connected services, but the primary application to date has been to summon help in the case of an accident or other emergency. GM offers the service to car buyers free for a few months to try out before initiating a monthly fee — the service can cost $200 to $300 per year — and is looking to offer more services to retain those trial customers.

Using the OnStar system, RelayRides members can use a mobile app to reserve a car and unlock and lock the door. Owners of the vehicles can earn money from renting out their cars, and set the price for how much they want their cars to be rented. Depending on the location of where the car is parked, car owners can earn hundred of dollars per month, says RelayRides.

RelayRides, which first launched in the Summer of 2010, has been building a network of car owners and drivers interested in using cars a service. For much of the time, RelayRides has been installing a communications device in the vehicles to facilitate the reservation process, which can be a somewhat expensive and labor-intensive process. But in the GM cars, the OnStar system acts as that control gadget. RelayRides also won’t be installing communication devices in its customer’s cars in the future, but will use a combination of the OnStar system and will facilitate key sharing for non-OnStar subscribers.

RelayRides isn’t the only peer-to-peer car sharing company out there. Getaround, which sells a kit to its car owner customers, and Wheelz, which has an investment from Zipcar are two other ones. The service can be envisioned as sort of “car sharing 2.0″, in contrast to traditional car sharing networks like Zipcar and CityCarShare, where the organization owns the fleet of cars.

One of the major hurdles with these services is security. HiGear, a high-end luxury peer-to-peer car sharing company was the target of thieves and shut down. Investor Sunil Paul backed away from his idea to launch peer-to-peer car sharing via a startup called Spride Share because of his concerns over insurance and the business model. RelayRides says the OnStar system makes its peer-to-peer service more secure, as the OnStar vehicles can be controlled and tracked in the network.

Auto makers have an interesting relationship with car sharing. Car sharing has been proven to lead to fewer cars being purchased, so in a small part, car sharing is cannibalizing the auto maker’s business. But a variety of automakers are realizing they can benefit from car sharing in various ways, including getting their cars in front of the young and urban who normally wouldn’t be test driving their cars. Other companies, like Daimler, and Volkswagen, are trialling their own car sharing pilots.

RelayRides is backed by over $13 million in venture funding from investors including Google Ventures, August Capital, Shasta Ventures and General Motors Ventures.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Connected world: the consumer technology revolution
• Opportunities and risks in the share economy
• Cleantech, meet connectivity: a new era of energy efficiency

This is Zipcar’s third strategic move into the European market through acquisition or equity investment. Zipcar bought London-based Streetcar in 2010, and late last year took a majority stake investment in Barcelona-based Avancar. Frost & Sullivan has projected a $3 billion market for car sharing in the European Union alone.

Griffith told me in an interview that Zipcar has been watching CarSharing.at for about 6 months as it captured market share in Austria. Vienna is a particularly important market for Zipcar’s expansion into Europe, said Griffith, and with Vienna, Barcelona and London, “we have three cities and a deliberate strategy to replicate our network in North America in Europe.” Zipcar will begin using the Zipcar brand for CarSharing.at users by the beginning of next year.

While European expansion is Zipcar’s primary goal right now, expanding into Asia is a more “medium term” plan, and Griffith said Zipcar would likely create a partnership if it expands in Asia. “In Europe we want to be the operator and owner of the network, but we feel differently about the market in Asia,” said Griffith.

Beyond European growth, Zipcar has been looking into the peer-to-peer car sharing market — where car owners rent out their cars into the network — through its investment in startup Wheelz. Griffith told me that Zipcar is interested in peer-to-peer car sharing for two reasons: 1) peer-to-peer could expand the footprint of Zipcar users into markets with lower volume use, as Zipcar makes most of its money off of cars that are rented out a lot, and 2) peer-to-peer could also introduce more vehicles into a network when demand is high and the car fleet available is small.

However, Griffith also told me that peer-to-peer “as a standalone business is a tough model,” as “so much of the revenue is shared with the car owner.”

Zipcar has 700,000 members and 9,000 vehicles in its global fleet.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Ups and downs for cleantech in Q1
• Cleantech third-quarter 2012
• Opportunities and risks in the share economy