The country's leading traditional auto-sharing company is announcing this morning that it's the lead investor in a $13.7 million financing round for California-based start-up Wheelz.
Wheelz got its start at Stanford last year, and it's expanding to a few other California universities this year. Unlike Zipcar, which provides its 673,000 members with a fleet of thousands of cars that they can rent by the hour, peer-to-peer outfits including Wheelz, Getaround, and market leader RelayRides let actual drivers loan out their cars to other drivers.
Zipcar already has a presence in more than 250 college campuses around the country, and now it has a new way for students and faculty members to drive off on errands or leisure.
Wheelz lets students with parked cars on campus seamlessly rent out their vehicles when they don't need them. The owner gets paid more than enough to offset the extra wear and tear. The renter doesn't have to worry about the heavy tabs and obligations of actual ownership.
Zipcar isn't the only one buying into Wheelz. A venture capital firm backed by some current and former Ford
The paparazzi seem to be seeing Ford and Zipcar together a lot these days. Ford struck a deal with Zipcar last year to introduce shiny new Ford models into Zipcar's campus car-sharing program, hoping that the students would take to the rides when they graduate or move off campus and need a car of their own. Get a garage, you two!
Zipcar doesn't necessarily need the peer-to-peer juice at the moment. It's growing just fine in its own niche. Revenue climbed 21% in its latest quarter, and it has come through with better than expected profitability in its first three quarters as a public company. Its nearest car-sharing competitor -- Hertz
Having a second growth vehicle in its lot is the right thing for Zipcar to do.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Zipcar and Ford. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
The Motley Fool owns shares of Zipcar, Ford Motor, and Hertz Global Holdings. Motley Fool newsletter services have recommended buying shares of Zipcar, Ford Motor, and General Motors. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.