Avis Budget Group to Buy Zipcar for $500 Million

Zipcar, one of the pioneering "sharing economy" companies, is being bought today by the Avis Budget Group (proprietors, as I'm sure you can guess, of the Avis and Budget rental car brands) for $500 million in cash. The strategic logic of the deal is very clear. A year ago, there were four major rental car concerns in America—Avis Budget, Dollar Thrifty, Hertz Global, and Enterprise. Hertz and Enterprise have both launched in-house hourly rental operations to compete directly with Zipcar. Avis Budget bought Dollar Thrifty a few months ago. So that left the rental car world with two players that do both hoursly and traditional rentals, plus Zipcar and Avis. A meger gives Zipcar investors a nice exit while creating a very strong firm. Zipcar's big outstanding problem is that demand for Zipcars is highly spiky. People who want to use a car to commute to work are going to want to...