Zipcar Explains Its Latest Rate Hike

We here at Boston Daily love Zipcar, but we were dismayed when we got an email from the company explaining that it was raising its rates for the second time in 2008. Some of our car-sharing friends swore that if it keeps up, they’d just buy a used car for their weekend road trips and grocery shopping.

We called Zipcar’s Boston General Manager, Dan Curtin, to find out if the car-sharing company’s fuel costs is causing it losing money as fast as the airline industry.

“Fuel is only 10 percent of our costs. [High gas prices] do sting, but because of that we’re able to ride through some of the peaks and valleys. But I don’t think that anybody really expected to see the spike that fuel has done,” Curtin says.

The company will charge an extra 25 cents per hour for weekday reservations, and an additional 75 cents per hour on weekends. Curtin explains that the company has found that weekday drivers stay closer to home, thus using less fuel than weekend road-trippers.

“We try to make rate increases make sense, and we try to be fair,” Curtin tells Boston Daily. He points out that the company is keeping the hourly rate of its 50 hybrid vehicles in the 850-car Boston fleet at $7 per hour. The company hopes to acquire more gas-sipping hybrids as the 2009 models roll into local dealerships.

When asked if the company fears a tipping point where heavy Zipcar users will elect to buy their own vehicle, Curtin sounds remarkably confident.

“They’ll stick with us,” Curtin says with conviction. “When you start putting the numbers together on how much it costs to own a car versus us, we’re clearly going to continue to come out ahead.”

Curtin reports that most of the member feedback has been, “overwhelmingly supportive and overwhelmingly positive.” He does add that he gets zany suggestions from members, ranging from charging drivers who make jackrabbit starts at stop lights to creating an algorithm that would allow users to take the cars on a one-way trip.

While we had the GM on the phone, we asked him if the company has any plans to reinstall satellite radio, which it took out of its cars during the merger talks between XM and Sirius.

“Never say never,” Curtin says coyly. “They have some work to do, but we can certainly look at that once they’re done with their merger.”

What about adding GPS units to aid occasional drivers like us?

“I think we’d probably look at something more manufacturer-based,” Curtin replies. “We don’t have plans to put any freestanding units in there right now. But it would be nice to be able to help out some of those poor folks who don’t know how to get from Storrow Drive to Cambridge.”

Curtin says this is the last price increase drivers should expect for a while. “Barring any crazy price increases for fuel, I think we’ve settled down for a good long time.”

Photo from Zipcar.com