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    Avis Buys Car Sharing Company Zipcar For $500 Million



    January 2, 2013

    By Drew Dowdell

    Managing Editor - CheersandGears.com

    Avis Budget Group and Zipcar, Inc. have announced an agreement where Avis Budget will aquire Zipcar for $12.25 a share or about $500 million total. Zipcar has about 760,000 members (including yours truly) across 20 metro markets in the U.S., Canada and Europe with locations at over 300 university campuses. Car sharing is now a $400 million per year business in the U.S. market alone.

    Avis Budget expects to gain $50 million to $70 million in savings by combining the two companies. Zipcar gains access to Avis Budget's fleet to supplement their own in times of high demand while Avis Budget gains an increased utilization of its fleet.

    From my own perspective, I believe this is a good move for both companies. As a frequent Zipster, I regularly run into times when no Zipcars are available for the time slot I need. Having more cars available as well as additional locations is a win for the Zipcar's customers.

    Press Release on Page 2

    Drew Dowdell is Managing Editor of CheersandGears.com and can be reached at Drew.Dowdell@CheersandGears.com or on Twitter as @cheersngears


    Avis Budget Group To Acquire Zipcar For $12.25 Per Share In Cash

    - Combined company will be the global leader in car sharing and mobility solutions.

    - Combination expected to produce $50-70 million in annual synergies.

    - Transaction targeted to close in spring 2013.

    - Avis Budget re-affirms its prior estimates of full-year 2012 results.

    Jan 2, 2013

    PARSIPPANY, N.J. and CAMBRIDGE, Mass., Jan. 2, 2013 /PRNewswire/ -- Avis Budget Group, Inc. (NASDAQ: CAR) and Zipcar, Inc. (NASDAQ: ZIP), the world's leading car sharing network, today announced that Avis Budget Group has agreed to acquire Zipcar for $12.25 per share in cash, a 49% premium over the closing price on December 31, 2012, representing a total transaction value of approximately $500 million. The transaction is subject to approval by Zipcar shareholders and other customary closing conditions, and is expected to be completed in the spring of 2013. The Boards of Directors of both companies unanimously approved the transaction, and Zipcar shareholders representing approximately 32% of the outstanding common stock have agreed to vote their shares in support of the transaction.

    Car sharing has grown to be a nearly $400 million business in the United States and is expanding rapidly in major cities around the world. Zipcar has led this industry, leading in innovation and world-class service. Zipcar now has more than 760,000 members, known as Zipsters, with a market-leading presence in 20 major metropolitan areas in the United States, Canada and Europe, and fleet positioned at over 300 college and university campuses. Zipcar has combined leading-edge technology, an outstanding customer experience, and clear brand messaging to develop strong loyalty and advocacy among its customers.

    "By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our Company to better serve a greater variety of consumer and commercial transportation needs," said Ronald L. Nelson, Avis Budget Group chairman and chief executive officer. "We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company. We expect to apply Avis Budget's experience and efficiencies of fleet management with Zipcar's proven, customer-friendly technology to accelerate the growth of the Zipcar brand and to provide more options for Zipsters in more places. We also expect to leverage Zipcar's technology to expand mobility solutions under the Avis and Budget brands."

    Avis Budget expects to generate $50 to $70 million in annual synergies as a result of the transaction. In particular, Avis Budget expects significant cost reductions across the fleet life cycle (from procurement to operations and maintenance to disposition, as well as financing), in addition to savings from eliminating Zipcar's public-company costs. Avis Budget also plans to achieve substantial cost savings by increasing fleet utilization across the two companies. Significant revenue growth opportunities exist, including by leveraging Avis Budget's fleet to meet more of Zipsters' weekend demand, which is currently constrained by fleet availability.

    These synergies, combined with the expected growth and rising profitability of Zipcar, are expected to make the transaction accretive to Avis Budget's earnings per share in the second year following the acquisition, excluding certain items and purchase-accounting effects.

    "We are delighted to announce our intention to join the Avis Budget Group family of companies, and we believe this combination is a win across the board for our members, shareholders and employees. We will be well positioned to accelerate enhancements to the Zipcar member experience with more offers and additional services as well as an expanded network of locations," said Scott Griffith, chairman and chief executive officer of Zipcar. "As the leading global provider of car sharing services, with a brand that is synonymous with the category, we remain committed to the values and vision that have driven us forward for many years, grounded by our passion for delivering a superior experience to every member for every trip, every day. By combining Zipcar's expertise in on-demand mobility with Avis Budget Group's expertise in global fleet operations and vast global network, we will be able to accelerate the revolution we began in personal mobility."

    "Avis Budget's existing infrastructure, scale and experience with managing multiple brands make us uniquely positioned to accelerate the growth and profitability of Zipcar," Mr. Nelson added. "At the same time, we are committed to retaining the elements of the Zipcar brand and culture that have allowed Zipcar to achieve such rapid growth and success over the last twelve years."

    Following the acquisition, Zipcar will operate as a subsidiary of Avis Budget Group and will continue with its planned move to new headquarters in Boston, Massachusetts. Avis Budget anticipates that key members of the Zipcar management team, including Mr. Griffith and Mark Norman, president and chief operating officer, will continue to set the overall direction and run day-to-day operations of Zipcar.

    Avis Budget Group expects to fund the purchase price primarily with incremental corporate debt borrowings, as well as available cash. As of September 30, 2012, Avis Budget Group had cash and marketable securities of approximately $554 million, and Zipcar had cash and marketable securities of approximately $82 million, or approximately $2 per Zipcar share.

    Citigroup is acting as financial advisor, and Kirkland & Ellis LLP is acting as legal counsel, to Avis Budget Group. Morgan Stanley is acting as financial advisor, and Latham & Watkins LLP is acting as legal counsel, to Zipcar.

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    ZipCar is a limited use limited growth potential. This is a bigger win for Zip than it is for Avis\Budget. I am surprised no other car rental company has decided to add a zipcar quick short term rental option before. The few times I have seen zipcars in the Seattle area or on Stevens pass they seen to be well used for how young the car is.

    People just do not car about cars that are not theirs.

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    I disagree on limited growth potential and on limited win for Avis.

    This lets Zipcar have easier (less expensive) access to more cars and it gives Avis an additional outlet for their cars coming out of rental rotation to make profit longer.

    My only fear is that it will make Zipcar's fleet much more generic. Right now, they have a wonderful diversity of cars.... I fear them turning into ZipNissanSentra.

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    No brainer! Zip founders make out like Bandits, Avis does the expected and gets in ground floor on a new type of rental biz.

    At a minimum, Avis knocks out a small but significant new competitor.

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    I disagree on limited growth potential and on limited win for Avis.

    This lets Zipcar have easier (less expensive) access to more cars and it gives Avis an additional outlet for their cars coming out of rental rotation to make profit longer.

    My only fear is that it will make Zipcar's fleet much more generic. Right now, they have a wonderful diversity of cars.... I fear them turning into ZipNissanSentra.

    I think for dense inner city's this will be a win for Zipcar users with more access to auto's and yet I do agree that they could go the way of Bland rental fleet.

    Yet outside of dense inner city use, zipcar and the other new start up that allows owners of cars to rent out to others will have limited traction.

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    I disagree on limited growth potential and on limited win for Avis.

    This lets Zipcar have easier (less expensive) access to more cars and it gives Avis an additional outlet for their cars coming out of rental rotation to make profit longer.

    My only fear is that it will make Zipcar's fleet much more generic. Right now, they have a wonderful diversity of cars.... I fear them turning into ZipNissanSentra.

    I think for dense inner city's this will be a win for Zipcar users with more access to auto's and yet I do agree that they could go the way of Bland rental fleet.

    Yet outside of dense inner city use, zipcar and the other new start up that allows owners of cars to rent out to others will have limited traction.

    .

    .... well... yea... but over 50% of the country's population now lives in cities. That's a pretty good market base.

    I've been a member of Zipcar since they arrived in Pittsburgh when they bought Flexcar. I often have to hunt for vehicles because everything near me is taken. I've actually been considering closing my account with them for this specific reason. They are fleet constrained way before they are customer constrained.... but now it looks like they have a remedy to that.

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    Could zip car be the future for college students and people who do not want to have the hassle of auto ownership? This does make me rethink if we could see the auto rental market become a auto share market for inner city people. Yet is America really 50% living in dense cities? Is seems that suburbs still requires car ownership.

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    Could zip car be the future for college students and people who do not want to have the hassle of auto ownership? This does make me rethink if we could see the auto rental market become a auto share market for inner city people. Yet is America really 50% living in dense cities? Is seems that suburbs still requires car ownership.

    Zipcar is already placing cars in key areas that are between "city" and "suburb" including college campuses that are anything but urban.

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    Zipcar is already placing cars in key areas that are between "city" and "suburb" including college campuses that are anything but urban.

    Yes, they have a location in Tempe, AZ on the ASU campus down the street from my office, which is quasi-suburban...

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    Inner City and Campuses tend to make sense for this model of business, but I have a hard time seeing rapid growth outside these markets.

    Not to say that I might or someone else might not come up with a way to influence suburban people to take this concept on as a 2nd or 3rd auto.

    I guess if you do not need a truck or 4x4/awd for mountain trips, then it might make sense for one to have an account where you could quickly get your hands on an auto for short term use.

    See and there is where it might still have growth is by marketing a new approach on how to sell ZipCars.

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    Thinking on this, maybe all rental companies should go to membership programs where people could use them as a 2nd or 3rd auto for special needs.

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    Not to say that I might or someone else might not come up with a way to influence suburban people to take this concept on as a 2nd or 3rd auto.

    I guess if you do not need a truck or 4x4/awd for mountain trips, then it might make sense for one to have an account where you could quickly get your hands on an auto for short term use.

    See and there is where it might still have growth is by marketing a new approach on how to sell ZipCars.

    Yes, sort like the neighborhood Enterprise rental car or U-Haul...I rent cars from Enterprise when I do a weekend road trip or a truck from U-Haul when I've had to move furniture to my storage unit..

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    Not to say that I might or someone else might not come up with a way to influence suburban people to take this concept on as a 2nd or 3rd auto.

    I guess if you do not need a truck or 4x4/awd for mountain trips, then it might make sense for one to have an account where you could quickly get your hands on an auto for short term use.

    See and there is where it might still have growth is by marketing a new approach on how to sell ZipCars.

    Yes, sort like the neighborhood Enterprise rental car or U-Haul...I rent cars from Enterprise when I do a weekend road trip or a truck from U-Haul when I've had to move furniture to my storage unit..

    But then why spend the money on ZipCar, why not just add this feature to your options. I am sure Enterprise or any of the other rental companies could do this also. It is not like ZipCar has a deep bench of customers to exploit.

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    Not to say that I might or someone else might not come up with a way to influence suburban people to take this concept on as a 2nd or 3rd auto.

    I guess if you do not need a truck or 4x4/awd for mountain trips, then it might make sense for one to have an account where you could quickly get your hands on an auto for short term use.

    See and there is where it might still have growth is by marketing a new approach on how to sell ZipCars.

    Yes, sort like the neighborhood Enterprise rental car or U-Haul...I rent cars from Enterprise when I do a weekend road trip or a truck from U-Haul when I've had to move furniture to my storage unit..

    But then why spend the money on ZipCar, why not just add this feature to your options. I am sure Enterprise or any of the other rental companies could do this also. It is not like ZipCar has a deep bench of customers to exploit.

    Brand recognition...the ZipCar brand is established, so this gives Avis an in to customers that would never have considered a regular rental car company.

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    Interesting, I have learned more about ZipCar than I have ever known before. I wonder how they grew when I really see no advertising for them at all.

    Including fuel is a nice feature, what else do they include in comparison to a rental company and how does a car get services/refueled? I assume you always bring it back empty or as low as possible.

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    No. There is a credit card in the sun visor and you fill it up if it is below 1/4 of a tank. There are certain pin numbers you need to include when purchasing the gas, so don't think you'll be able to run around filling up your own vehicles on their credit card. They will also reimburse you for filling up the washer fluid. Some insurance is included by default, but the deductable is $500. They will let you buy that down to nothing for an extra $75 per year.

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    Very interesting, I can see this as a valid use by inner city folks not really needing a car the majority of the time.

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    Services like ZipCar, AirBnB, Bike Share, cowork environments, are all part of the 'collaborative consumption' movement. Not part of my reality context, but I can understand the mindset for people who don't want to be tied down with ownership of stuff....

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    Services like ZipCar, AirBnB, Bike Share, cowork environments, are all part of the 'collaborative consumption' movement. Not part of my reality context, but I can understand the mindset for people who don't want to be tied down with ownership of stuff....

    While I see value in a service like this for a select group of inner city people, I do not see this being a mass market use here in America. I can see this more in use in Europe or the Asian Rim.

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    Services like ZipCar, AirBnB, Bike Share, cowork environments, are all part of the 'collaborative consumption' movement. Not part of my reality context, but I can understand the mindset for people who don't want to be tied down with ownership of stuff....

    While I see value in a service like this for a select group of inner city people, I do not see this being a mass market use here in America. I can see this more in use in Europe or the Asian Rim.

    I think it's also a generational thing....a lot of younger, well educated people in the US prefer city life to suburbia and traditional commuting, etc.

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    Services like ZipCar, AirBnB, Bike Share, cowork environments, are all part of the 'collaborative consumption' movement. Not part of my reality context, but I can understand the mindset for people who don't want to be tied down with ownership of stuff....

    While I see value in a service like this for a select group of inner city people, I do not see this being a mass market use here in America. I can see this more in use in Europe or the Asian Rim.

    You have to remember, more than half the country lives in cities. That's a lot of market. Blanket a city with a bunch of sharable cars and a lot of city folks will opt out of car ownership all together. Zipcar is far cheaper than fueling, insuring, and paying for parking for your own car. If you live in a spot with a few of these ZipCars around, it can be a viable alternative to a $350 a month car payment + insurance + gas + parking..... plus you can pick your car depending on your mood or needs.

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    Yet as more use this service I doubt people will care about the auto and I suspect they will end up trashed as I have seen of the few Zip's in Seattle. That is one thing I have noticed about City dwellers, they tend to not care about taking care of things.

    I admit I will never be a Zip Car user, but I do understand the market and need for the Inner City Dweller.

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    Services like ZipCar, AirBnB, Bike Share, cowork environments, are all part of the 'collaborative consumption' movement. Not part of my reality context, but I can understand the mindset for people who don't want to be tied down with ownership of stuff....

    While I see value in a service like this for a select group of inner city people, I do not see this being a mass market use here in America. I can see this more in use in Europe or the Asian Rim.

    You have to remember, more than half the country lives in cities. That's a lot of market. Blanket a city with a bunch of sharable cars and a lot of city folks will opt out of car ownership all together. Zipcar is far cheaper than fueling, insuring, and paying for parking for your own car. If you live in a spot with a few of these ZipCars around, it can be a viable alternative to a $350 a month car payment + insurance + gas + parking..... plus you can pick your car depending on your mood or needs.

    It makes perfect sense to me... at some point I want to live in a downtown loft type environment again somewhere, I did it for a few years in Denver (but still had cars). My next home when I leave AZ will probably be in suburbia, as I really want more square footage...

    Edited by Cubical-aka-Moltar
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    Yet as more use this service I doubt people will care about the auto and I suspect they will end up trashed as I have seen of the few Zip's in Seattle. That is one thing I have noticed about City dwellers, they tend to not care about taking care of things.

    I admit I will never be a Zip Car user, but I do understand the market and need for the Inner City Dweller.

    You are fined by Zipcar if the next user finds the car in bad condition or damaged. The users are responsible for keeping the car clean and reporting damage if found. Again, I've been using Zipcar and its predecessor Flexcar since 2007 and never really had a problem.

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    Even though I own a car, I use zip car because taking the bus to work and then grabbing a Zipcar for 2 hours over lunch is cheaper than driving in and paying for parking on days that I need to run an errand. I also use Zipcar when I need a truck. I bus into downtown or over to Carnegie Mellon University, grab the truck and go.

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      Next thing is that what I thought was someone turning down the dash lights was actually not it at all but Mazda not putting any lights in the door lock or all the window buttons. Only a single light dot was on the drivers window. At night on an island that does not have bright street lights to allow the view the space to show up, finding your door locks or windows buttons is a pain. I know every maker puts basic controls on either side of the steering wheel, but Mazda really has a strange layout compared to GM, Ford or Dodge. Yes everyone has a different take on this but after all these years, some things should be consistent across all auto's. Example is the windshield wipers and rear window wiper, which should be first on the stick? I say front windshield wipers and yet Mazda felt rear should be.
      After checking the lights, getting myself all set for driving, we loaded up to head out for our first day of fun. 
      The Radio / Nav system has a Bluetooth option. My son said he would connect his phone so I could hear the navigation for where we were going first for breakfast and to stream Pandora. Sadly their Bluetooth SUCKS! takes about 1 1/2 to 2 miles of driving before the system is sync'd and working, was this way all week, at least it did work once it sync'd. I did think maybe this was an Apple to Mazda issue, but after testing it with my wife's and my own Android phones, experience was the same. Sucky Bluetooth connection and reading of the device. Pandora was actually better being streamed from my sons phone than from the auto system as there was much delay and pause on the auto system but everything played fine on the cell phone.
      Off and driving around Kona, first thing noticed by the family was the auto let allot of wind and road noise in. Definitely not my Trailblazer for sure which is much quieter inside. Observation was that while once the radio / Nav was up and working, the angle of it in the auto in a very sunny place makes the screen pretty much useless unless you use your hand or some other item to shade the display. Backup camera worked fine, very reliable but their fish-eye lens really distorts the view. Using your shoulder checks shows two blind spots in the rear making you want to check the camera but again distorted, so was cautious of backing out, pretty much always backed into places so I could easily get out of them.
      Corners, I have always prided myself on knowing my corners of an auto, yet this design of the Mazda really sucks for your corners, after a day of driving, I did figure out just how far I had to be to be in tight but not hit anything. Lucky for me, I never caused damage on any of the auto.
      Rain, WOW, So by our resort we were in the mid to upper 80's and sunny the whole time, from about 4000 to 9000 feet the island would have rain on and off and boy was it heavy. Two things noticed that the wife was not happy about nor was I, was that even on the fastest speed the windshield did not clear the rain away very well, bothered her more than me, after all heavy rain, but even in lite rain this other really bothered me and is a safety fail. The way the design of the auto is with the side mirrors, the rain makes the side mirrors unusable. I could see nothing out the mirrors as the water comes off the front windshield and smears across the side mirrors and pretty much makes those little mirrors useless. Not a good design at all.
      Seats, after our first day in the CX9, the kids let me know that the back seat was hard and not comfy for more than an hour of driving. The front bucket seats while having good side support and for a person as big as me was fine, for my more petite wife, she and the kids when they sat in the front all felt like they were sitting in a Toilet falling through. Very uncomfortable bucket seat. On top of this, only the drivers seat has full electronic control so I could have it go down to the floor, the front passenger seat was set very high and so you only had back and forth and low back support. Very limited, why not have the front seat equal to the drivers. Made no sense and the one time I tried to sit in the front, it was impossible, the setting of the seat was too high for me. All around failure. 3rd row seat was nice folding flat into the floor, but two poor designs, again head rest were manual as they had to be folded down and then you had to pull the 2nd row seats forward to allow you to put up or down the third row seat. Kay said it was the same comfort as the second row and for her plenty of space but then she is only 5'2" tall and very petite.
      Engine, WOW, Yes on Kona you have 3 mountains, 1 that is spewing lava, very cool to visit and see, above 9000 feet they had snow after snow storm so was able to snorkel / scuba in the morning and ski in the afternoon. Why do I bring this up, simple the engine really leaves a ton to be desired. average for the week was 16.8 mpg in a FWD CUV. Sucky no way to put it for this auto, worse yet was unless you kept it revved above 4500 rpm, any minor hill caused you to loose speed fast. Driving up to the Observation scopes was very tricky as it was a dirt road with snow and traction just sucked. Not what I was expecting. So according to Mazda this is a 227HP motor on regular gas or 250 on premium. I only used regular the whole time and should have gotten 22/28/25 average of City/Highway/Combined and yet did not matter, 16.8 is what the auto reported to me as average MPG. I was filling up every other day, plus who ever thought hiding the fuel filler door release on the left side of the drivers seat under the seat was cool is an idiot. Not easy to get too.
      Lighting, Interior left much to be desired as places I would expect lights to be the auto had none, places that should be easy to read where not, only the drivers dash and nav system would give you clear visible displays, otherwise even the overhead lights left allot to be desired. Mazda says they have key-less illumination entry system, but it never worked on our auto unless the pathetic light they had on each rear view mirror that put out barely any light is what they consider to be this system. Exterior, the headlights are OK, they give you enough light to see the road, but when no other auto's were around I did use the high beams to see the curves better in the road.
      Door Locks, Mazda says they have speed-sensing auto locking, not sure what it is, but the double click to unlock the auto was slow and most times a third press of the button was needed.
      Center console, comfy for my arm rest, strange with the dual split opening in the center, you had to open both sides to store anything in it, so not sure why they decided to split such a small center storage arm rest into what is about two 2 1/2 inch wide doors. A single door would be much better.
      USB ports, sad that all would allow connection to the NAV system but only 1 port in the center arm rest would charge your device and even then only android, apple could not get a charge off the port. Really weird cheap implementation of the USB ports.
      End Result - The auto was reliable and got us all over the island for 812 miles. Other than that, I really could not find any exciting point that would make me recommend the auto to anyone. My family was happy with our trip, wished we had a better auto. Next time I will reserve much earlier.
    • By William Maley
      With the rise of services of car and ride-sharing services such as Uber and Lyft, a number of people have said this would begin the downfall of buying and owning a new vehicle in the U.S. But a new study commissioned by Kelly Blue Book says that isn't happening for the majority of the country.
       
      The study revealed many Americans consider vehicle ownership to be more convenient, reliable, safer than car- and ride-sharing services. It also revealed that 76 percent of respondents that use these services are planning to buy or lease a vehicle within the next two years.
       
      "While there are numerous benefits to ride sharing and car sharing, our data reveals that owning a car still reigns supreme, with reliability, safety and convenience all being major factors," said Karl Brauer, senior analyst for Kelley Blue Book.
       
      Other findings of KBB's study include,
      73 percent of respondents said they have heard of these ride-sharing services, but only 16 percent have used them. This is similar to car sharing services as 43 percent said they have heard of them, but only 7 percent have taken advantage.Most of the respondents using these services are young people living in urban environments. This makes sense as owning a vehicle in this environment is more of a pain. Car and Ride sharing services are seen more as substitutes for taxis and rental cars. Affordability was the top reason given respondents who don't own a car.Only 5 percent said using a ride-sharing service was the reason they don't own a car. 3 percent said gave the same reason for why they use car sharing services.  
      Source: Automotive News (Subscription Required), Kelly Blue Book
       
      Press Release is on Page 2



      Page 1 of 2 1 2 → Last »



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    • By William Maley
      With the rise of services of car and ride-sharing services such as Uber and Lyft, a number of people have said this would begin the downfall of buying and owning a new vehicle in the U.S. But a new study commissioned by Kelly Blue Book says that isn't happening for the majority of the country.
       
      The study revealed many Americans consider vehicle ownership to be more convenient, reliable, safer than car- and ride-sharing services. It also revealed that 76 percent of respondents that use these services are planning to buy or lease a vehicle within the next two years.
       
      "While there are numerous benefits to ride sharing and car sharing, our data reveals that owning a car still reigns supreme, with reliability, safety and convenience all being major factors," said Karl Brauer, senior analyst for Kelley Blue Book.
       
      Other findings of KBB's study include,
      73 percent of respondents said they have heard of these ride-sharing services, but only 16 percent have used them. This is similar to car sharing services as 43 percent said they have heard of them, but only 7 percent have taken advantage.Most of the respondents using these services are young people living in urban environments. This makes sense as owning a vehicle in this environment is more of a pain.
      [*]Car and Ride sharing services are seen more as substitutes for taxis and rental cars. [*]Affordability was the top reason given respondents who don't own a car.
      Only 5 percent said using a ride-sharing service was the reason they don't own a car. 3 percent said gave the same reason for why they use car sharing services.



       
      Source: Automotive News (Subscription Required), Kelly Blue Book
       
      Press Release is on Page 2



      Kelley Blue Book Study Reveals Ride-Sharing, Car-Sharing Services Do Not Pose Threat To Car Buying
      KBB.com Finds Americans Not Ready to Give Up Freedom Associated with Vehicle Ownership

      IRVINE, Calif., March 10, 2016 /PRNewswire/ -- The results are in, and according to Kelley Blue Book, ride- and car-sharing is not an imminent threat to new-car buying and vehicle ownership, despite the growing number of services being offered to consumers. This is just one of many interesting findings from the recent 2016 Kelley Blue Book Ride Sharing/Car Sharing Study, released today by KBB.com, the vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry.
       
      Commissioned by Kelley Blue Book and conducted by Vital Findings to understand the motivations behind ride-sharing and car-sharing usage, as well as opinions and behaviors surrounding current and future transportation, the survey found that these sharing platforms primarily are used as substitutes for taxis and traditional rental car companies, and have very limited impact on current or future vehicle ownership. In fact, the expected transportation method of the majority of Americans that currently own or have access to a vehicle (74 percent) is to drive themselves in the next six months. When asked what statements about owning or leasing a vehicle respondents agree with, 80 percent completely or somewhat agreed that owning or leasing a vehicle provides a sense of freedom and independence, followed by 62 percent that completely or somewhat agreed that owning or leasing a vehicle gives you a sense of pride/success.
       
      Ride-sharing services, including Uber and Lyft, among others, use a Smartphone app for consumers to request and pay for a ride on demand from drivers who typically own the cars they drive. On the other hand, car-sharing companies, such as Getaround, ZipCar and Car2Go, among others, provide consumers with the opportunity to borrow vehicles and drive themselves, using a Smartphone app to schedule, unlock and pay for borrowed vehicles.
       
      "Ride- and car-sharing services are getting a lot of attention these days, and we wanted to better understand the current landscape of these app-fueled platforms and how they may impact both consumers and the auto industry moving forward," said Karl Brauer, senior analyst for Kelley Blue Book. "While there are numerous benefits to ride sharing and car sharing, our data reveals that owning a car still reigns supreme, with reliability, safety and convenience all being major factors."
       
      Looking down the road, the field is relatively level for potential ride-sharing providers to enter the market with more than one-third of respondents (37 percent) giving the most consideration to companies with a ride-sharing app, followed closely by rental car companies (32 percent) and taxi/limo companies (26 percent). In addition, 24 percent of those surveyed also would consider vehicle dealerships as a potential ride-sharing provider over vehicle manufacturers (16 percent) and individuals with a vehicle (15 percent). Respondents were least likely (14 percent) to consider tech companies as potential ride-sharing providers.
       
      Similar to ride-sharing, the opportunity for new car-sharing services to enter the market is fairly level, as traditional vehicle rental companies (36 percent), companies specifically created to provide vehicle sharing (33 percent), and notably, vehicle dealerships (31 percent) were among the most considered car-sharing providers among respondents.
       
      Sample of Additional Findings from 2016 Kelley Blue Book Ride Sharing/Car Sharing Study
      Awareness Doesn't Mean Use: Nearly three-quarters of respondents (73 percent) are aware of ride sharing, but only 16 percent have actually used these services, with Millennials and city dwellers leading usage. As for car sharing, 43 percent of respondents are aware, but only 7 percent use these services. Still Planning to Buy or Lease: Vehicle-sharing services are viewed as substitutes for taxis (41 percent) and rental cars (39 percent), with more than three-quarters (76 percent) of vehicle-sharing users reporting their intent to purchase or lease their own vehicle within the next two years. Ownership Has Its Benefits: According to respondents, vehicle ownership is more reliable (81 percent vs. 19 percent for ride sharing; 78 percent vs. 22 percent for car sharing), safer (80 percent vs. 20 percent for ride sharing; 80 percent vs. 20 percent for car sharing) and more convenient (74 percent vs. 26 percent for ride sharing; 75 percent vs. 25 percent for car sharing) than depending on sharing services. Budget Is Primary Ownership Factor: Among those surveyed who did not currently own or lease a vehicle, more than half of respondents (57 percent) name affordability, which also was the highest listed reason, as the main deterrent for not purchasing or leasing their own vehicles. Only 5 percent said utilizing ride sharing and 3 percent said utilizing car sharing as reasons for not owning a vehicle in the future. Safety First: More than two-thirds of respondents (69 percent) believe that ride-sharing services are a great way to combat drunk driving; however, only 33 percent of those surveyed deemed ride-sharing to be safe. In fact, 48 percent stated they wouldn't be comfortable riding alone with a ride-share driver. The national survey reveals the responses from more than 1,900 U.S. residents between the ages of 18-64 years old, weighted to Census figures by age, gender and ethnicity that have a variety of residential and ownership patterns.

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