Zipcar, the revolutionary car sharing service, is having its Initial Public Offering on April 13. The company is a bit different from a car rental company; customers don’t rent a car, they pay a subscription fee and have access to cars the company owns stationed in various places. Some believe high gas prices will drive up membership.
Nasdaq to start carrying car sharing company stock
The Nasdaq stock index will begin carrying shares of Zipcar, the car sharing service company starting on Thursday, April 14, according to MSNBC. The company is having its initial public offering of stock on Wednesday, April 13. The company expects that its shares will be valued from $14 to $16, and hopes to raise about $89 million. The aim of the IPO is to raise cash, as the company wants to be able to use $46 million from the sale of stock to pay debts. Zipcar has never turned a profit, but it has been growing quickly and bought out several competitors already. It will trade under the ticker ZIP and is offering 6.6 million shares, according to Reuters.
Not a car rental service
Zipcar plans differ in price, but in general a person pays an annual subscription fee, which is $60 for the most basic plan, according to the Zipcar website. Subscribers get a personal passcard that they must have to unlock the doors; each car is equipped with an electronic reader. Zipcars user must reserve the block of time when they wish to use the car, pick the model they want and then show up wherever the car is parked. Once a time slot is booked, only the person who made the reservation can unlock the car. Insurance and fuel are included, as well as 180 miles of allotted use. Anyone who needs to use the car more than 180 miles a day or needs a Zipcar every day can purchase an extended plan.
The drawing power of the service is for people who only occasionally need a car. Committed urban dwellers and college students are the primary focus, and the company already has cars stationed in more than 50 cities in 32 U.S. states and two cities in Canada and in London, England. The company has been expanding from its home base in Massachusetts since it was founded in 2000, but the high cost of acquiring new vehicles has kept Zipcar from turning much of a profit. However, as the cost of gas is approaches $4 a gallon, analysts think the demand for a car one doesn’t have to maintain or keep fueled will have great appeal.