Back to top

Analyst Blog

Zipcar Inc., a wholly owned subsidiary of global vehicle rental giant Avis Budget Group Inc. (CAR - Analyst Report), yesterday announced expansion of its car sharing services in the City of Sacramento, California. This marks Zipcar’s 26th major metropolitan market.

The company is impressed with the growing demand for self-service car rentals in the region. As per Zipcar’s expansion plans, the community of Sacramento will be able to avail Zipcar services from today, with an access to nearly 40 vehicles around different convenient locations in the city.

The company has its presence in the state since 2009, when it first started its services on the campus of University of California, Davis. In 2010, it expanded its business in the City of Davis and in 2011 it started offering services to California State University, Sacramento.

However, due to its limited access, the services were available only to the students, faculties and staff, and in other nearby vicinities. The recent development will provide ample opportunity to Sacramento residents to avail Zipcar’s all-purpose car sharing services. The company will charge its members $7.50 on an hourly basis or $69.00 for 24 hours.

Avis Budget, which competes with JTH Holding, Inc. (TAX), acquired Zipcar in Jan 2013 for a total value of $500 million. Following the completion of acquisition, Avis Budget has been aggressively expanding Zipcar’s services at various locations. Since the acquisition, Avis Budget has increased Zipcar’s presence from 20 to 26 major metropolitan markets.

In the United States alone, car sharing is currently a lucrative business worth nearly $400 million and is rapidly advancing in other parts of the world. With over 760,000 members, Zipcar now enjoys presence in 26 major cities of the U.S., Canada and Europe.

We believe that the acquisition of Zipcar has facilitated Avis Budget to extend its offerings from car rental to car sharing, and has helped it compete better with rivals such as United Rentals Inc. (URI - Snapshot Report) and Hertz Global Holdings Inc. (HTZ - Snapshot Report). The latter has its own car sharing service, Hertz On Demand.

Zipcar operates a car-sharing network and provides self-service vehicles to members in and around their residences and workplaces. The company's vehicles are available for use through its reservation system accessible by phone, the Internet or wireless mobile devices. Avis Budget currently carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%