Zipcar Faces Paying More for Fewer of DC’s Curbside Spaces

The District Department of Transportation looks to increase competition and revenue on curbside spaces through an auction
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Photograph courtesy Zipcar

With more than 55,000 members in DC, Zipcar is concerned about the city’s decision to auction off curbside spaces for its cars in the next few months. A Zipcar spokesperson talked to John Hendel at TBD On Foot, saying that DC will go from charging $200 per year for each of its 84 curbside spaces reserved for the carsharing service to auctioning them off at an opening bid of $3,600 per space. John Williams, a consultant for Zipcar, told Hendel that the company is looking at going down to just 12 city-owned curbside spaces.

The city’s move is twofold: to increase competition in the city’s carsharing market—Zipcar has essentially had a monopoly since 2007 when it bought out Flexcar—and to increase revenue for valuable street parking.

The District Department of Transportation, in a December 2007 document [PDF] outlining the city’s commitment to promoting carsharing, discussed the cost of devoting curbside parking to what was at the time two companies.

District incurred expenses for designating the curbside carsharing spots. Costs for ordering and installing signs and painting the asphalt were approximately $75,000 for the demonstration period. The District also lost about $75,000 in revenue from the 41 metered spaces that were designated for carsharing. Thus the total cost of the carsharing program to DDOT was about $150,000.

The Washington Post’s Mike DeBonis reported recently that DDOT’s John Lisle issued a statement saying that “the city was not being compensated at all for these spaces for a long time. If the market supports a higher return for the District for its public space, I think that’s a win for the city and taxpayers.”

Though Zipcar assured Hendel that it didn’t foresee increases in membership costs and that it would likely move cars in the spaces it lost out on in the bidding process to non-city-owned spaces. Likely competitors to the popular car-sharing service will be businesses that are already in the line of renting cars: Hertz, Daimler, and Enterprise.

Still, though Zipcar is protesting the increased cost and limited number of parking spaces, the company seems to be doing well financially. In its second-quarter investor report, released on August 3, Zipcar reported that revenue had increased 34 percent over the previous year’s second quarter to $61.6 million. Zipcar also boasts a total of 605,000 worldwide and have launched new services in Providence, Rhode Island, and Sacaramento, California. Zipcar recently managed to knock out a Boston competitor, iCar, Wheels to Go and has been listed by one investment information Web site Seeking Alpha as one of the three promising stocks to watch in tough economic times along with LinkedIn and Tesla autos.

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