Market Failure Is Better Description Of Zipcar Than Public Failure

Published on: Jan 03 2013 by Tan

Zipcar - Mazda

Avis just bought car sharing service Zipcar for $500M. Read more about the deal here.

I’ll let the experts weigh in on the deal, but I think the title of Dennis Berman’s article on the Zipcar “Zipcar: Startup Genius, Public Failure” is inaccurate and somewhat misleading. If you didn’t read the article, you would think Zipcar failed to provide people with a service that let you drive a car without actually having to permanently buy or lease, traditionally rent it, or borrow from a friend.

If you did read it, you got a discussion about how the company failed its investors and stakeholders with a disappointing stock price after its much lauded IPO. For those that aren’t in the know: “public failure” as in publicly traded company failure, not failure to the public (i.e., citizens). Which is why I think “market failure” would be a more appropriate description, although even “market” has its own limitations in terms of accurate word usage.

Ultimately, I’ve always seen Zipcar as a worthwhile endeavor–an alternative to personal vehicle ownership. It’s like renting a car, but without having to go all the way to your neighborhood rental car location. Less discretionary income spent on transportation means more money for other things like organic food, iPads, and other positive economic transactions… yadda yadda yadda.

I’ve personally never used it, but those that I know who have used Zipcar liked it. Almost everyone I know is familiar with the service. I hope car sharing becomes more popular in the future, but that would require a lot of converging factors (denser cities would be one big one).

UPDATE: Corporate failure?

[photo via Zipcar]

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