DETROIT — It wasn’t long ago that car-sharing services like Zipcar were perceived as a threat to the sales volumes of traditional automakers.
Ford Motor Company is taking the view that drivers who rent from Zipcar by the hour just might be potential customers down the road.
Ford and Zipcar are expected on Wednesday to announce an unusual
partnership in which the Detroit automaker will supply its vehicles to
Zipcar locations on 250 college and university campuses in the United
The two-year program will provide Zipcar with up to 1,000 Ford Focus
sedans and Escape sport utility vehicles for students who prefer
short-term vehicle rentals to the trouble and expense of owning their
In addition to providing the cars, Ford will offer the first 100,000
university students who sign up for Zipcar a $10 discount on the
network’s $30 annual membership fee. In addition, Ford has agreed to
subsidize $1 of the hourly rental rate for the first one million hours
of use on any of its vehicles. The typical Zipcar rental costs $8 to $9
The program, which starts Thursday, is a significant step in the
expansion of Zipcar, based in Cambridge, Mass., which went public with
an initial stock offering early this year, and in August reported strong
revenue and membership growth that exceeded Wall Street expectations.
Zipcar has been a fixture in urban areas like New York, Boston, San
Francisco and Washington for several years, and has been gradually
moving into smaller markets like Sacramento and Providence, R.I.
Recently, it has been seeking to rapidly expand its presence on college
The alliance with Ford will raise Zipcar’s presence substantially in the
student market — and get more American cars into Zipcar’s fleet. Nearly
all of Zipcar’s current models are foreign nameplates like the Honda Civic, the Mini Cooper and Toyota Prius.
Currently, Zipcar has more than 600,000 members in the United States, Canada and Britain.
The impetus for the new partnership began two years ago at a
transportation forum when William Clay Ford Jr., Ford’s executive
chairman, met Scott Griffith, Zipcar’s chairman and chief executive.
In an interview, Mr. Ford said he had become interested in car-sharing
networks as part of the long-term answer of how congested cities could
solve transportation issues without simply adding more vehicles.
As an ardent environmentalist, he said he could appreciate how
short-term car rentals could ease fuel consumption in cities already
overcrowded with privately owned vehicles.
The auto industry has been pouring vehicles into regular rental car
fleets operated by big companies like Hertz and Avis, for years.
Mr. Ford said that Zipcar offered an opportunity for the automaker to
reach a new demographic of younger, college-age drivers who otherwise
might not try a Ford product.
“We are looking at the future of transportation more holistically,” he
said. “We shouldn’t be threatened by these different business models. We
should embrace them.”
Zipcar owns more than 8,000 cars and offers its members more than 30
different models. But Mr. Griffith said the deal with Ford was a
powerful endorsement of its market and its services.
“Having Bill Ford and the Ford Motor Company validating Zipcar as a
business model and as an emerging transportation brand is a big step for
us,” Mr. Griffith said.
Zipcar has bought 650 Ford cars and S.U.V.’s to start, and will start making them available for rental within two weeks.
The membership and rental subsidies offered by Ford could entice frugal college students to give the brand a try.
“The cheaper it is, the more I would be willing to use it,” said Tyler
Harangozo of Windsor, Ontario, an incoming freshman at Wayne State
University in Detroit.
Mr. Harangozo was among a crowd of Wayne State students looking over the
Ford Focus during orientation activities on Tuesday.
He said he expected to commute to school by bus, but appreciated the
option of renting a Zipcar for a few hours if needed.
“I can’t rely on public transit to get all around Detroit,” he said. “I’ll probably need a car once in a while.”
Zipcar memberships are available to anyone who has had a driver’s license for two years and a good driving record.
That makes it especially appealing for people under the age of 21, who
often cannot qualify to rent a car from a traditional daily rental
agency. At Zipcar, even a teenager can become a member.
Rental fees include insurance coverage, and Mr. Griffith said background
checks had generally weeded out poor drivers from its membership rolls.
“If you have a D.U.I. or high-speed driving violations, you won’t be
able to drive one of our cars,” he said.
Ford sees the program as an inexpensive means to introduce younger
drivers to its products, particularly the compact Ford Focus. The cars
are equipped with Ford’s Sync infotainment and communications systems,
and they are among the most fuel-efficient models in the company’s fleet.
“It’s a great way to reach these first-time drivers,” Mr. Ford said.
“And the data shows that the No. 1 reason people leave Zipcar is to buy a
vehicle, and that they are heavily influenced by what they have driven
as a member.”
In the past, Mr. Ford said, his company did not have the right models to attract college-age drivers.
“The Focus is the right product at the right time to reach college
kids,” he said. “We don’t know where car-sharing is headed, but Ford
wants to be a part of it.”