Operations

Enterprise Breaks into Car Sharing Market

LCT Staff
Posted on February 13, 2008

ST. LOUIS, Mo. — Enterprise Rent-A-Car Co., the U.S.'s largest rental-car company by revenue, launched a car-sharing service in St. Louis earlier this week. The program, called WeCar, started last month on the campus of Washington University, but this part of the initiative will be downtown and available to the general public. The move is the latest sign that major car-rental companies, which have been dipping their toes in the car-sharing and hourly rental waters, are about to dive in.

Enterprise, which is based in Clayton, Mo., says it eventually will expand WeCar beyond St. Louis, although it doesn't yet have concrete plans for where and when. Hertz Corp., a unit of Hertz Global Holdings Inc., says it is studying car sharing closely and, once it settles on a workable program, will test it in major urban centers across the country. Even U-Haul International Inc., a unit of Amerco best known for its do-it-yourself moving vehicles, has a car-sharing program called U Car Share that is available in a growing number of college markets, including Ann Arbor, Mich., and Berkeley, Calif. Avis Budget Group Inc. is watching from the sidelines for now; a company spokesman says it is following the segment closely but isn't on the cusp of announcing anything new.

Car sharing is billed as an inexpensive, environmentally minded alternative to owning a car. Customers sign up for annual memberships ($35 annually in WeCar's downtown program) and pay hourly or daily usage rates (WeCar's are $10 per hour, $30 overnight) for the cars, which they reserve online for a set time length. Gas, insurance and an allotment of free miles (200 per day at WeCar) are included. The environmental benefit is that car sharing theoretically takes cars off the road, since numerous members are sharing a few cars. Zipcar and Flexcar, the national car-sharing pioneers that merged last fall, have a combined 180,000 members and 5,000 vehicles. The cars also are often fuel-efficient and economical. All nine of the cars in the St. Louis WeCar program are Toyota Prius hybrids.

The target market for car-sharing programs is densely populated urban areas like New York, where car ownership is low. The typical customers are people who commute to work by other means but still need a car occasionally for errands, particularly grocery shopping. Car-sharing companies also have targeted colleges, since campus parking is generally scarce for personally owned vehicles and many students don't meet the age requirement at rental companies.

SOURCE: Wall Street Journal

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