MOTORSNEWS ZIPCAR CONTRACT:US CAR-CLUB operator Zipcar has edged out rivals to win a contract to operate an exclusive contract for Westminster Council. The company beat off competition from Streetcar and Connect by Hertz to operate an on-street car hire service which will be marketed under the Westminster Car Club brand.
But the awarding of the contract – thought to be the first of its kind in the UK – has aroused guarded concerns from some rivals over whether the granting of sole-operator licences could act against consumer interest.
Transport charity Carplus last September estimated UK car-club membership was 50,000. But many operators report accelerating membership growth rates of up to 100 per cent as motorists seek a low-cost, pay-as-you-go alternative to car ownership.
Westminster is setting aside 100 bays for Zipcar across the borough this year, rising to 400 within four years.
Kieran Fitsall, Westminster parking manager, said the car bays would be converted from metered and “pay and display” spaces.
Fitsall defended Westminster’s decision to appoint a sole operator, arguing it would give the council greater control over the roll-out of the franchise, which he hoped would persuade residents to forego first- or second-car ownership.
He declined to outline the financial arrangements of the award, but said Zipcar would pay an unspecified “marketing bounty” to the council.
James Finlayson, chief executive of City Car Club, said booming demand from consumers was drawing in new entrants such as Hertz and Zipcar to the UK market who, along with existing competitors, were seeking to expand rapidly and were prepared to make short-term losses in a “land grab” to secure the most lucrative bays.
City Car Club, with 10,000 members, has built a dominant market position in Edinburgh as well as competing with players such as Whizzgo and Streetcar in London.
Even so, Finlayson queried whether there could be “too much of a monopoly situation” in some schemes.
Fitsall argued other car-club schemes could continue to work successfully in Westminster by operating from car parks and off-street locations.
He added that Westminster was not alone in granting a sole licence. Nearby Islington has an exclusive tie-up with Streetcar.
Westminster officially launches its scheme next month.
– FT Service