Avis Bought Zipcar For Nearly $500 Million

In an attempt to attract a new type of clientele and expand its car rental options, Avis recently purchased Zipcar for $491.2 million. Car sharing — which allows members to rent a vehicle for an hour or two instead of a day — has become increasingly popular in large metropolitan cities and college campuses. While traditional car rentals have struggled in the current slow-growth economy, car sharing services have seen an increase in profits.

“I’ve been somewhat dismissive of car sharing in the past but what I’ve come to realize is that car sharing, particularly on the scale that Zipcar has achieved and will achieve, is complementary to our traditional business,” Avis Chairman and CEO Ron Nelson told the Associated Press. Nelson believes that the recent acquisition will enable Avis to reach younger, more tech-savvy consumers that prefer sharing services.

The purchase will also help Avis better compete with Enterprise and Hertz, which already have their own smaller car-sharing services. Avis said it expects certain members of Zipcar management, including Chairman and CEO Scott Griffith and President and Chief Operating Officer Mark Norman, to help run the company’s day-to-day operations.