Blog Post

Zipcar CEO: Why We're Not Going Electric Anytime Soon

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

zipcargeneric1Car-sharing startup Zipcar has long touted the environmental credentials of its service — primarily the fact that people who use the subscription-based network for renting cars by the hour tend to drive less and own fewer cars. Founded a decade ago, the company began to hit its stride when it started marketing to green-minded urbanites and college students. So why do most of Zipcar’s 6,500+ vehicles still run on gasoline?

Last week, Zipcar announced the launch of what it calls its first EV Pod, starting with a fleet of 20 hybrids and two plug-ins (an all-electric Citroen c1 and a plug-in hybrid Prius) in London, with plans to grow the EV Pod to some 400 vehicles by 2012, with 30 percent of them being hybrid. We’ve written on GigaOM Pro (subscription only) about the potential for a network like Zipcar to help introduce electric vehicles into the mass market, since, as Zipcar CEO and Chairman Scott Griffith told us recently, “Electric cars by nature have to be connected cars.” Likewise, Zipcar’s car-sharing service is connected to a communications network so the company can keep track of vehicle location, scheduling and performance.

So the rollout of a few plug-ins (five years after the company first deployed an all-electric Toyota Rav-4) seemed somewhat less than ambitious. And while it’s just the beginning of Zipcar’s plans for alt-fuel vehicles, don’t expect an all-electric fleet anytime soon: Griffith says we need more vehicle software and data (among other things) in order to get there.

According to Griffith, “We’ve been out talking to everyone who’s making EVs or says they’re going to make an electric car in the near future.” He sees Zipcar as “a terrific early platform” for electric vehicles, largely because of its users’ demographic and driving habits. Griffith noted that the average trip in a Zipcar is less than 25 miles and lasts about four hours, making as much as 95 percent of all Zipcar trips short enough for first-generation electric vehicles with limited range. There’s also the scheduling element: Zipcar users are accustomed to scheduling their driving time, and unless we have an ultra fast-charging battery (or ubiquitous battery swap stations, as Better Place envisions), charging time for electric cars will have to be scheduled into daily use.

At the same time, however, Griffith said, “We don’t want to put new barriers up at a time when car sharing is really moving into the mainstream,” and all-electric vehicles are still pretty foreign to most drivers. “That’s why we started with a converted Prius,” which can run on gasoline in addition to the electric battery.

Zipcar has more questions about electric vehicles beyond how subscribers will react to them. Griffith said that while the sticker price of upcoming plug-in models is generally known, Zipcar still needs to gather data about the costs of maintenance, infrastructure needs and, “the opportunity cost of having the car sit for charging” before it incorporates more of the technology into its fleet. After the company collects this data it can use it to competitively introduce electric vehicles intro its fleet. Ultimately, Griffith says, it’s also going to take a lot longer than people think for electric vehicles to enter the mainstream, and won’t happen for many more years. But you can bet that when electric vehicles go mainstream, Zipcar will be among the first to go electric.

16 Responses to “Zipcar CEO: Why We're Not Going Electric Anytime Soon”

  1. Zipcar is not the cutting edge company that it once was. Griffith says it will take many many years for ev’s to become mainstream, as traditional car manufacturers are shutting down, and the survivors like Nissan are retooling entire factories for electric cars. Time for Zipcar to step aside like Dell, and let a new innovator take over.

  2. Josie Garthwaite

    @Roger – Zipcar installs charge points at the spots where it keeps plug-in cars — enough for the less than 25-mile and 4-hour trips that they’re used for 95 percent of the time. Not enough to keep me from being nervous about renting an all-electric Zipcar for a long road trip, though.

    What kind of support would you like to see from the government? Are you thinking federal, state or local level incentives?

  3. I do not know what kind of government support this operation gets, if any, but it may be a good idea for the government to push a few bucks into this to help them go more electric.

    You can’t expect a company like this to take the brunt of going electric without help. Anyway, are there sufficient charge points for all those EVs?

  4. Andrea

    Zipcar has a number of hybrids in its Boston fleet, and their hourly rate is significantly less ($7/hr versus $10+/hr) to encourage people to use them over gas-powered zipcars.

  5. Josie Garthwaite

    @Brad – Agreed, cars running on coal power long term doesn’t sound like much of a solution. But how about cars running on energy from renewable sources?

  6. If we shift to electric vehicles does that increase our already huge use of coal? The least clean fossil fuel? I like the idea of moving away from petroleum, but think shifting to an even more coal-based economy may bot provide the benefits we think we’re getting with electric vehicles. EV’s are a good first step, but we need the giant leap to fuel cells and truly clean transportation.

  7. Josie Garthwaite

    @Stephen Cameron – You raise some good points: other car sharing networks have been moving even faster to adopt EVs, and the question about how to anticipate charge levels after trips still has to be answered. Given the size of Zipcar’s network, it has the potential to have a bigger impact when it comes to introducing alt-fuel vehicles even though the company has been moving very cautiously in this direction (from an all-electric Rav 4 several years ago to about 1000 hybrids now and, as I mentioned, the less-than-ambitious two plug-ins in London last week).

    Do you use EVs in a car sharing network? I’m interested to hear about your experiences with that.

  8. Stephen Cameron

    It’s too bad that this is such a zip puff-piece, because clearly the integration of electric cars into urban car sharing would seem like a natural fit. Has Ms. Garthwaite done any research beyond Zipcar on this, she would have been able to mention things like the city of Paris issuing an RFP for a 2,000 vehicle electric program to start as early as next year. That “Zipcar will be amongst the first to go electric” is highly unlikely. They have been losing money for so long (‘forever’ actually), and are now so focussed on trying to go public, that they have lost any ability to innovate (outside of their business plan). Little Hourcar in Minneapolis still has more plug-ins operating in their fleet than Zipcar, and they’ve been there for years. This “EV pod” (2 plug-in cars) is nothing more than a calculated PR stunt – or a reuqirement for their City of Westminster partner. A bigger issue for Zipcar and any other car share company – well worth testing – is how to know how much charge is GOING TO BE left in a vehicle after a trip, so it can be rented again. Charging between users needs to be flexible, not fixed.