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Zipcar, Inc.: Steer Clear of the “Winner’s Curse” (Part 2)

Comments (4)

  1. Dr. Antje Danielson, Zipcar cofounder says:

    I don’t know Mr. Basenese but I sure know why I started Zipcar in 1999. I am amused to hear the same arguments that we had to listen to almost 12 years ago, repeated by him. Back then most people used those arguments to “predict” our demise and prophesied the failure of the company within months. Yet, here we are, 11 years after incorporating, with hundreds of thousands of people using the service and loving it. Maybe investors today understand again that infrastructure and a strong brand can provide security in the long run. Maybe they are not buying into a “hype” but into a new paradigm, which Mr. Bacanese clearly doesn’t understand if he calls Zipcar “just another rental car company”.

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    john henry Reply:

    Mr Danielson, if it is so good, why can’t you make money..guesses public’s money enrich you only.

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    Louis Basenese Reply:

    Thank you for taking the time to respond Dr. Danielson. Although our opinions vary greatly, the good news is Zipcar is now publicly traded. So the market can be the final arbiter of our disagreement… and “fair value” for the company.

    If you’d care to offer a counterargument to my columns, please contact me. I’d be glad to formally share your analysis of Zipcar with our readers.

    [Reply]

  2. Frank Voelker says:

    Sorry Dr. Danielson,

    after you being involved with Zipcar since 1999 I would guess you have evolved a tunnel view and don’t want to see some basics.

    Personally I don’t believe you need to know the specifics because the generals rules of business are valid for pretty much all kinds of business. Very simplified: How much money comes in, how much money goes out.

    At Apr. 28, your company published to outfit 20 New York City Vehicles with Yakima Bike Racks and Empire Passport Permits for Complimentary Access to New York State Parks. To me that means more money going out.

    Your business models says, insurance and gas included. Gas prises are rising strongly, insurances will follow. Both means money going out.

    I see car manufacturers entering your market (If you don’t see it in the USA, have a look to Germany, e.g. Daimler and BMW, the US will follow). Your costs of buying a car will be higher than the costs of some of your (future) competitors.

    The costs of buying and operating a car with new technology (e.g. Hybrids) will be higher. That will be a future demand.

    Your slogan “Pedal to the metal – savings through the roof” are a contradiction in itself. If you drive that way your gas consumption – and costs – will increase drastically. Just a hint. More money going out of Zipcar’s (and the shareholder’s) pocket.

    Also I see another, more general topic because of the attitude of the people. What they don’t own they don’t honor. They simply don’t care. Which means your costs of cleaning and repairing the cars will be higher than by a privately owned car.

    I have this issue each time I rent a car. They are sometimes disgustingly dirty and in bad technical condition. If you want to keep your customers, it means higher operating costs.

    I hope your business idea will survive. But under these conditions I don’t see my money in your business model.

    Good Luck

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