Zipcar Uses Subscription Commerce To Challenge Uber

Zipcar, the unit of Avis Budget Group, has launched a program in which commuters in cities pay for a monthly subscription to gain access to unlimited cars during a workweek.

According to a news report in The Wall Street Journal, the move on the part of Zipcar is aimed  at expanding into other markets, beyond college campuses and cities where people don’t own cars. With the new program, customers get access to a car for unlimited and exclusive use from 5:00 a.m. Monday through 7:00 p.m. Friday for $199 to $299 a month, with the price varying by city. They also have to pay $0.45 a mile. While the price may seem high, the report noted that the average monthly payment for a lease is $439.

The program, which officially launched on Thursday (Oct. 26), started as a trial for commuters living in New York City, with Zipcar slowly rolling it out to more cities. “This is meant for someone who lives in the city, who doesn’t really want to own a car because it’s expensive and it’s a hassle, but they still need to get to work every day,” Tracey Zhen, Zipcar’s president, said in an interview with The Wall Street Journal.

The paper noted that the pricing of the Zipcar subscription program – which includes gas, insurance and parking – is cheaper than other programs offered by General Motors, Cadillac and Volkswagen’s Porsche. Customers who want to use the vehicles on the weekends will pay the normal rates, according to the report.

This move on the part of the Avis unit comes as rental car companies are trying to determine their place in a market that has competition from ride-hailing companies, including Uber and Lyft. By offering a cheaper way for commuters to get around during the week, Zipcar is hoping to remain relevant in a quickly changing marketplace.