ZipCar

Zipcar has expanded its partnership with the Massachusetts Bay Transportation Authority by adding six new on-site vehicles and one new Zipcar location to various T stations in the Boston area, the company said Thursday.

It is. But this isn’t a yard sale nor an eviction. No T-shirt uniformed street teams promoting Blackberrys to government workers. No ad-hoc charity lovers selling Krispy Kreme donut boxes for $5 in front of the Metro escalators. No sidewalk floormat signs that appeared until DCRA put the kibosh on them. Enter Zipcar, the popular car sharing service that has its DC office at 717 D St, NW, and what we think is the most unorthodox attention getter we’ve seen downtown. Unorthodox enough that we call it news.

A few weeks ago, camera ready PQ Living reader Kathy caught two Zipcar “scenes” - one on F Street, NW, and another on 7th Street, NW - and sent them in to us. Camp F Street (photo below) depicts two folks enjoying themselves at a makeshift campsite while Living Room 7th Street is simply a vacant sofa parked on the sidewalk (photo above). We’ll let readers figure out the hook.

My 2002 Prius can't be beat for everyday driving. I regularly get 40-45 mpg, saving me hundreds of dollars every year on gas. It's got a lot of pep, so highway driving is a snap. And its terrific turning radius and compact size make it a dream to park, whether at the mall or on a city street.

But given its compact size (it seats four comfortably, five only if the person in the middle back seat has short legs), it's not the vehicle you'd willingly use to pick up your daughter -- and all her stuff -- from college, the challenge I faced recently.

Fortunately, I'm a member of ZipCar, the car company that lets you rent vehicles by the hour or the day. ZipCar, whose motto is "Wheels When You Want Them," is gaining in popularity because it makes using a car so cheap compared to owning one. According to the company's calculations, owning a car like a Ford Fusion can cost you almost $800 a month, once you figure in parking, insurance, vehicle registration, gas, maintenance, new tires, and other related expenses. Even if you drive a lot (though not every single day), you could be paying as little as $322 a month using a Zip Car. You can join for $50 a year.

We talked to Anthony Marinos, a DC region marketing manager for Zipcar, who told us that this short campaign was one Zipcar thought would be a good fit for DC and for reaching out to people to promote awareness of the service. How did pedestrians walking by react? He said, “It put a smile on people’s faces.”

The pedestrian count on 7th Street, NW, is as high as it gets in Washington DC with workers, residents and tourists making the trek to offices, condos and attractions at all times of the day and also making our neighborhood’s Main Street a real marketing plum. Whether you’re a fan of this kind of public space advertising or not, it does garner attention. It made us turn our heads.

Using my zippy membership, I was able to rent a Honda Element for the 7 hours I needed to retrieve my daughter from school. I simply reserved my car a day in advance, walked two blocks in my neighborhood, and found the car clean and ready to go. I swiped my membership card over a scanner embedded into the windshield. The car doors unlocked, and I found the key in the ignition. Off I went, easy as pie, for a little more than $11/hr.



I chose the Honda Element over a wide range of other options because it offered the most room for the greatest amount of gas mileage. I drove 242 miles on about a tank of gas, for an average fuel economy of around 22 mpg - not quite as good as the Ford Escape Hybrid SUV (which wasn't an option, either at ZipCar or at any of the conventional car rental companies I checked), but better than most conventional SUVs. I filled the gas tank up using the gas card in the glove compartment, so it didn't cost me anything.

Interested? If you live here or go to school here, you can rent a ZipCar. If your city's not on the list, send the company an e-mail and let them know you'd like to Zip. They're opening new locations all the time - maybe you can get them to consider your neighborhood. You can also search "car share" on the Internet to see similar options other companies may be offering in your community.

Boston-based Zipcar now has 31 vehicles at 14 different T stations, including the newly added Wollaston location.

T stations that got additional Zipcars include Forest Hills in Jamaica Plain, Savin Hill in Dorchester, North Quincy, Quincy Center and Wollaston in Quincy, which is a new location for Zipcar.

In Greater Boston, Zipcar has 877 vehicles in over 300 locations. Standard Zipcar rates are $9.25 per hour and $69 per day.So you live in downtown Vancouver - or Toronto, or Ottawa, or most major Canadian centres - and don't really need the hassle or expense of owning a car, but there are still times when you'd like to get out of town for a few days, or just head up to Whistler for an afternoon's skiing.

For those occasions, there are several choices, including Zipcar, the Cooperative Auto Network (CAN), and - the newest kid on the block - Toronto- based CityFlitz, a mobile advertising company that provides Mini Coopers and Smart Cars for car-sharing members for just $1 a day.

According to a recent survey by the Canadian Automobile Association, it isn't cheap to own and operate a vehicle.

The CAA's 2009 Driving Costs brochure, which provides a comprehensive look at the price of owning a vehicle in Canada and the costs of such things as maintenance, fuel, tires, insurance, license fees and registration, depreciation, and financing, concluded that the annual cost of driving a 2009 Chevy Cobalt is $6,516 a year, or $17.85 a day. That rises to $23.63 a day for a 2009 Dodge Grand Caravan.

For people unable - or unwilling - to pay those costs, car sharing allows them to pay by the hour or day. Boosters say it's a lot cheaper than owning a car and encourages people to take transit, walk or bike.

"There are a few extra fees, but the biggest benefit is getting access to a vehicle for $1 a day," CityFlitz co-owner Paul Pelton said in an interview about his company (cityflitz.com), which launches in Vancouver in early June. "The only downside, and we don't think of it as a downside, is they have a wrapped car."

By wrapped, Pelton means ads that envelope the car, turning it into a billboard on wheels.

"Essentially, we're an advertising company with a car-share sideshow," said Pelton.

Although Pelton said his service is far cheaper than either Zipcar or CAN, it's not being offered as an alternative to those car-sharing services.

For starters, initially there will only be six CityFlitz cars in Vancouver.

There's also a $350 refundable one-time deposit, a $35 administrative fee at sign-up and a $7-a-month membership fee. A credit card with a rental car insurance package is required and drivers must drive a minimum of 30 kilometres, pay for their gas and stay within a certain area (called the Flitz Zone). The car, which must be returned within 24 hours, typically requires between two and 10 days to book. Initially, at least, there will only be 60 to 80 members fighting for those six vehicles.

"(Members) shouldn't expect to have a car available every single day," added Pelton.

Each car is equipped with a GPS tracking system which, among other things, allows CityFlitz to track - and levy fines of $500 on - drivers who speed.

CAN (cooperativeauto.net) charges more than CityFlitz, but it's far easier to get a car.

The non-profit network charges a $500 membership fee, which is refundable, and a $2.50-an-hour vehicle usage fee, plus driving charges of 18 cents to 38 cents per kilometre, depending on how many kilometres are driven each month (38 cents for up to 87 km, 28 cents for up to 249 km and 18 cents for 250 km or more).

Most CAN members pay about $4 an hour to use the car. They have access to a variety of models from a hybrid Toyota Prius to pickup trucks and SUVs.

In Vancouver, drivers can usually get a vehicle immediately on weekdays, but for weekends it often requires a day's notice.

On July 1, CAN rates will change, with fees for members ranging from $2.50 an hour to $30 a day and 35 cents for the first 35 km and 20 cents for each kilometre after. As well, there will be a $2 administration fee per booking to a maximum $6 a month.

For non-members, there's a $50 annual fee and rates from $7 an hour to $63 a day. They also get 150 free kilometres and pay 28 cents for each kilometre after that.

"Members also get discounted rates with car rental agencies if they go on long trips," CAN spokesman Bernadette Amiscaray said.

Meanwhile, Zipcar (zipcar.com) drivers can expect to pay a one-time $25 application fee and a $55 annual membership fee. It costs from $7 to $14.75 an hour to use a company vehicle, which includes insurance, gas, designated parking, maintenance, and up to 200 free km of driving in a 24-hour period.

Daily rates start at $69 ($49 for business accounts) and drivers are charged an extra 30 cents per kilometre over the 200 free km. There is no charge to refuel the vehicle.

A representative of the U.S.-based company said cars can be booked for up to four days, sometimes longer.

Vehicle types range from the Honda Civic to the Mini convertible.In recent years Americans appeared to be hooked on it and took advantage of home equity loans, easy credit and cheap short-term lease deals to send new-car sales to levels of more than 17 million a year.

Now the market has collapsed by 46 percent to below 10 million, as people are making do with the cars they have, leaving the industry to debate — and worry — about what the new normal will be once the recession ends.

Some say the downturn is temporary and that sales will spring back in a few years. Others believe Americans will rethink whether they need so many cars, particularly new ones.

The answer will be important to the Obama administration as it prepares to put G.M. into bankruptcy on Monday. After the company emerges from bankruptcy, the federal government will own about 70 percent of it, in return for $50 billion in taxpayer aid. G.M. has already received about $20 billion in federal help.

The Treasury Department’s advisers, who initially expected auto sales to pick up late next year, now foresee no jump in demand this year or in 2010. And even five years out, they expect annual sales to be about 15 million, still well below the peaks of this decade.

Making predictions is tricky in this economy. The market has grown more bleak, and worst-case scenarios drafted only months ago are becoming reality.

If sales do not recover, the Treasury will have to provide more financial support for G.M. and for Chrysler, which has received about $10 billion in federal aid, before they can stand on their own and the government can divest its shares.

People like Kate M. Emminger do not offer the carmakers much hope. Ms. Emminger sold her 2006 Toyota Corolla last April because she decided she could not afford her $250 monthly payment, even though she earns about $60,000 a year as a university events planner.

“It just became too expensive to have a car,” Ms. Emminger said. Now, she volunteers at City CarShare, a nonprofit organization in San Francisco, in order to earn free use of its vehicles, which normally rent to members for $5 an hour plus 40 cents a mile. Otherwise, she takes public transit.

But plenty of people in Detroit argue that once the recession is over, buyers will rush back to dealer showrooms.

If sales do pick up, carmakers eventually could be more profitable than they have ever been because of all the costs they have shed, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

“After you rebound from this artificial low in demand, wow,” Mr. Cole said of the potential for auto sales and profits.

He estimates that pent-up demand for new cars is actually about 4 million vehicles higher than the current selling rate, which in April would translate to 9.3 million a year, according to Autodata Incorporated.

Others, however, point to shifts suggesting that Americans’ desire — and need — for new cars may be cooling.

Baby boomers, the biggest group in the car market, are beginning to enter retirement, a stage of life when people typically buy fewer cars. Home values are down sharply, making consumers feel less wealthy, and also cutting off a handy source of money from home-equity loans for new cars.

“We sold to people who purchased cars by refinancing their houses,” said Wilbur Ross, the billionaire financier who has invested in steel mills and auto parts companies.

The housing and financial crisis has taken its toll on reliable customers like Frank Powell, a school administrator in the East Palo Alto school district in California. He moved out of the house he had lived in since 1983 and started renting a few months ago because of his debt burden, which includes auto loans.

“I used to buy cars all the time and took out loans to pay them off,” he said. “As soon as I paid part of one off I’d get another. I’d buy one for my kids, my wife, myself. I can’t do that anymore”

He now has a Cadillac Escalade sport-utility vehicle, but he is thinking about downsizing and driving something much smaller — and for longer.

“Something had to change,” he added. “You just can’t keep going with that many cars.”

Lifestyles have changed, too. As many people move back to cities from suburbs, they are swapping three-car garages for a single parking space. Public transit use is up.

“Too many people are looking at alternatives,” said Scott Griffith, chief executive of Zipcar, the national car-sharing company that has more than 300,000 members, up from about 200,000 a year ago. Mr. Griffith estimates that for every three members, a new car probably goes unsold.

“They’re much smarter about spending money and looking for ways that don’t even involve cars any more,” he added.

Of course, car-sharing services like Zipcar are not available everywhere. They are concentrated in urban areas and college towns, where owning a car can be burdensome and expensive.

Donald Grimes, an economist at the University of Michigan, is forecasting the lowest sales for the driving-age population this year since 1970.

From 1970 to 2001, there were 0.76 vehicles sold per driver in the United States. Now that figure has dropped to 0.4 vehicles per driver, and he does not see much of a rebound in coming years.

The swift decline has spooked the industry. “I don’t think there has ever been a period in our history like this,” Josephine Cooper, Toyota’s group vice president for government and industry affairs, said of her company, which lost $7.1 billion in the first three months of the year. “It is very, very sobering.”

Now Toyota and other carmakers must wait to see if Americans will return to their old car-buying habits — people like Jay S. Allen, owner of a San Francisco consulting firm, and his wife, Jennifer Nicoloff, a product manager at Gap. Over the years, they have owned eight cars between them.

But now they are carless, with no plans to buy. When he needs transportation, Mr. Allen either rides his scooter or borrows a car for a few hours from a local car-sharing service.

“The biggest thing right now is fear,” Mr. Allen said. “We don’t know which way the economy is going to go. We don’t want to buy anything that has long-term implications.”

The government's rationale for its involvement with GM falls in the "too big to fail" department. I know that the current administration is dedicated to ending the recession with as few human costs as possible in lost jobs and lost wages. Yes, the auto industry's woes coincided with the financial meltdown creating a liquidity crisis which left the federal government with the only pockets deep enough to invest in the bail-out and buy-out. But the macro-management of the economy at the federal level begins to look like micro-management when they get into the details of owning (or running) specific companies.

Is this a productive new use of assets? No. Is this a move toward transforming transportation? No. Is there a significant national security interest? No. Will this save more jobs than it kills? No. Will this promote innovation and industries of the future? No.

Okay, maybe there is some prospect of a leaner, more competitive company being created in the restructuring that will make me proud to own it and maybe to consider buying a GM car - if the name GM even survives. But the indicators make this look unlikely, for example: GM's lag in producing energy-efficient models; falling auto sales in general plaguing even world-leader Toyota; new business models such as Zipcar encouraging people to see cars as shared utilities rather than must-have personal possessions; and low-cost innovations such as the Tata Nano coming from the developing world. So I stick with my string of No's.

Where others see merely bankruptcy, I see a bankruptcy of ideas. The issue for GM is not just financial failure, it is a failure of imagination. Even Ford has a long way to go to be the Company of the Future.

The signs of GM's imminent failure were there well before the weak plan presented to Congress in November, which I criticized in detail in a Wall Street Journal interview. It would have been better to let the company fail on its own and then assist affected workers, dealers, and communities directly with transition support to start new businesses and create new jobs. We will have to assist them anyway, because the GM that emerges from bankruptcy will be a shrunken, hollow version of its former self, perhaps competitive but not viable in the long term without even greater change. This move smacks of preservation more than innovation.

I would advise the Obama administration to to help innovative new companies emerge from the ashes of GM. The entrepreneurial spirit will restore the American economy more effectively than propping up falling giants.

And if the administration wants to make bold moves, I suggest that what America needs is a big national innovation initiative, equivalent to the space program, to reinvent transportation. Not just to make it greener and more energy-efficient, but to make it radically different.