Profits absent as Zipcar grows
This is the question that BusinessWeek tries to answer in a new article on the car-sharing club and discovers that the numbers are not in Zipcar's favor. The culprit? High gas prices, of course.
BW says that while Zipcar should pull in $100m this year, the red ink will remain, most likley until next year. The one-price format that Zipcar uses means that the company has to eat the higher fuel costs. CEO Scott Griffith told BW that, "I lose sleep at night knowing I'm paying for gas for 225,000 people."
Competition from the traditional car rental companies who now offer hourly rentals and more car-sharing start-ups are also worrisome spots on Zipcar's future. The whole thing is worth a read.
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