LADOT Lays the Groundwork for Functional Car Share with Hertz. Goodbye ZipCar?

For as long as I’ve covered car-sharing in Los Angeles, it’s been something of a disaster. Our first story, published on Street Heat in 2007, was about how ZipCar’s buyout of Flex Car would lead to a dramatic reduction of car-share. Nearly six years later, Los Angeles, a city with over 4 million people, has a pathetic 40 cars in its ZipCar fleet, with less than a dozen in its nearest competitor, LAX Car Share.

A "Hertz on Demand" advertisement from New York City.

But that might finally change.

Wednesday afternoon, the City Council Transportation Committee will hear a report from the LADOT that will pave the way for an expansion of the city’s publicly available car share fleet. LADOT recommends an exclusive five year contract with Hertz, a company best known for its traditional rent-a-car business. In 2008, Hertz launched its carsharing service, now known as Hertz On Demand. Currently Hertz on Demand is located in six countries and has car share programs in a number of major cities including Boston, New York, Washington, DC, Miami, Chicago, Denver, San Francisco, and San Diego.

Car sharing is a model of car rental where people rent cars for short periods of time, often by the hour. They are attractive to customers who make only occasional use of a vehicle, as well as others who would like occasional access to a vehicle of a different type than they use day-to-day.

The largest competitor to Hertz on Demand, was ZipCar the city’s current official car share company. While staff admitted there is some risk changing companies, they also noted the low amount of cars already on the street. There is no word if ZipCar will continue its tiny car share service clustered around USC and UCLA if the city awards its contract to Hertz. While details of the proposed contract an be found after the jump, thousands of Angelenos are most interested in is how does Hertz’ proposal compare to ZipCars in terms of cost, availability and fees. The below graph from the staff report allows a quick comparison of the two proposals. Even a cursory examination shows that Hertz On Demand will be less expensive and will quickly have more cars on the street than ZipCars proposal.

The “Request for Proposal” that LADOT issued for a car share company last year asked for “single source” proposals, meaning that the Department wants just one place for L.A. residents to register to access the now publicly available cars. Once the contract is signed, after the Council approves it, Hertz estimates it will have 200 cars in its Los Angeles fleet in the next six months, with over 1,000 in the city by 2018. The initial fleet will be made up of new vehicles, and Hertz will replace the vehicles every 45,000 miles. The composition of the fleet (hybrid, gas, electric) will be determined in final contract negotiations.

As part of the arrangement, Hertz will compensate the city through revenue sharing, compensation for city staff and paying the city for exclusive parking spaces for their vehicles. Hertz actually proposes paying more for exclusive rights to a metered space than the city would earn if the space were being used the entire day. All in all, the city estimates revenue of between $3 million and $30 million from its agreement with Hertz.

The initial rollout will be in Los Angeles’ most heavily populated and transit dependent areas of the city and some of the smaller surrounding municipalities. The first areas covered by Hertz will include Westwood, South L.A. near USC, Downtown, Hollywood/VVest Hollywood, Koreatown, Mid-Wilshire and Marina del Rey/Venice.

  • Bring Car2Go to LA!! It’s a great service and perfect for car-free and car-lite people.

  • Eric B

    The biggest concern is the insurance. Hertz’s rates looks like they are lower primarily because they leave the public holding the tab when an underinsured (and infrequent) driver causes a wreck.

    Other than that, awesome.

  • Why is this going to be an exclusive contract? They should compete, like any other business (US Military contractors not withstanding)

  • Sirinya Matute

    This is interesting. Now I’m just wondering how my carsharing memberships I will have to acquire.

    Then again, Zipcar just cancelled my personal membership due to “lack of use”. I had a membership with UCLA’s commuter club – they give you 4 hours free a month if you are staff/faculty without a parking permit) – and a personal membership to be the back-up in case I ran over the 4 hours. Zipcar doesn’t have the infrastructure to charge me for any use above and beyond the 4 hours covered by UCLA. So the whole thing is really messed up. So maybe I’ll give up on Zipcar altogether. But I do ask for one thing, which is that Santa Monica – where I live – uses the same vendor. Probably asking for too much.

  • calwatch

    Hertz is better because they give you the same points as regular Hertz, and cash them in for longer car rentals. By the way ZipCar was purchased by Avis, so they are not some startup outfit, but a subsidiary of a large corporation. Since there are no true co-op carshares in the Los Angeles market (unlike City Carshare in San Francisco), Hertz is better than Avis solely because they link into the regular Hertz point plan. Hertz On Demand is also in the LA area already at Whittier College and Mt. St. Mary’s College.

    Car2Go serves a completely different market from Hertz On Demand. Car2Go is more like a self service taxi because you don’t have to return it to where you got it and cars are scattered in random locations, unlike Hertz which is just a dispersed car rental service.

  • Zipcar did an excellent job of providing a pilot program for the city to monitor and decide whether to move forward with full implementation. The Hertz deal is better in a multitude of ways:

    – City of LA receives record revenue with partnership with Hertz over Zipcar

    – Hertz doesn’t charge startup fees saving the member money up front

    – Potential to offer one-way rentals

    Although I am not crazy about the hourly rate maxing out at $22/hour, it will remain to be see how Zipcar will continue to operate once they are no longer attached to the City of LA? Will Metro continue to allow the Zipcars to park at Union Station since Hertz already has presence there? Will Zipcar GM head back to USC?

    Its also interesting food for thought that USC currently offers Zipcar and Enterprise Car Rental on campus. Does USC know that Enterprise also has Enterprise Car Share? LA has more options than people are aware.

  • Why would Zipcar cancel your membership when UCLA is paying for you to use?

  • Sirinya Matute

    I had two Zipcar memberships – a personal account that I got in 2005 and one associated by UCLA that was given to me when I went full-time in 2009. I hadn’t used the personal one in over a year, primarily because Juan and I replaced his 17-year-old car with something more reliable so I no longer exceeded the 4 complimentary hours.

    I still had my personal Zipcard as a back-up because Zipcar still wouldn’t separate the billing. Zipcar told me to call them but it’s way easier for me to deal with companies through any other mode besides the phone.

  • Sirinya Matute

    I had two Zipcar memberships – a personal account that I got in 2005 and one associated by UCLA that was given to me when I went full-time in 2009. I hadn’t used the personal one in over a year, primarily because Juan and I replaced his 17-year-old car with something more reliable so I no longer exceeded the 4 complimentary hours.

    I still had my personal Zipcard as a back-up because Zipcar still wouldn’t separate the billing. Zipcar told me to call them but it’s way easier for me to deal with companies through any other mode besides the phone.

  • Sirinya Matute

    I saw Car2Go in downtown Portland. I can’t comment on how it works since I didn’t use it. However, we were staying by a public square where, basically, they were throwing a party for carsharing. We thought this was awesome and amazing.

  • Sirinya Matute

    I saw Car2Go in downtown Portland. I can’t comment on how it works since I didn’t use it. However, we were staying by a public square where, basically, they were throwing a party for carsharing. We thought this was awesome and amazing.

  • Rose winslet

    Car rental services first started selling memberships and renting cars by the hour in 2000, but has really taken off in the past couple of years. First aimed at students, it’s getting plenty of urban professionals who don’t want the hassle and expense of owning a car.
    Reference: http://www.dan-dooley.ie/

  • The One way rental would make me move to Los Angeles over San Francisco then. I want to live a car owner free life and use mass transit and car sharing only when i really have to. Car2Go or the iGo Chicago Transportation Administration integrated CHICAGO CARD PLUS I-GO CARD that handles train, bus, igo car service. I could imagine with a small update to the TAP card system to integrate hertz on demand unlock and payment to it.

  • CarShare Directory

    According to LADOT this contract is STILL NOT signed. How much has Zipcar pledged to both Eric Garcetti and Mike O’Farrell to stall implementation?

  • CarShare Directory
  • CarShare Directory
  • stvr

    Can you follow up on why this NEVER happened? They should have chosen Zipcar or Car2Go.

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