Disruptors get disrupted, and that's what many bears believe is happening to Zipcar
The leading auto-sharing service -- with 709,000 Zipsters renting cars by the hour or day with insurance and gasoline included -- seems to be under attack.
Fellow Fool Jeremy Bowman highlighted the competitive landscape earlier this week.
has been testing a car-sharing platform with its corporate fleet since last year. (Nasdaq: CAR)
is even closer to Zipcar's turf, slashing its annual fees, offering one-way rentals, and now moving to transition its entire fleet to have Zipcar-like access. (NYSE: HTZ)
- Enterprise Holdings -- the company behind Enterprise, National, and Alamo -- acquired Mint Cars On-Demand several weeks ago.
- Daimler's car2go may lean on smaller Smart Fortwo vehicles for its fleet, but its flexibility and "per minute" pricing set itself apart from Zipcar.
Oh, and this is the conventional auto-sharing market alone. The popularity of peer-to-peer vehicle sharing -- where consumers lend out their own cars for profit -- is a niche that General Motors
Should Zipcar investors be worried by the sudden crashing of the movement it championed? No. Keep in mind that all of these options haven't stripped Zipcar of its growth-stock status. Revenue climbed 20% in its latest quarter, and margins at its more established markets are expanding. You wouldn't see that if this were a cutthroat market with Zipcar honking its horn for mercy.
Zipcar has openly said that it's monitoring what the competition is doing. If folks don't mind paying more for one-way rentals through car2go or if Hertz can make a profit with more flexible drop-off locations, of course Zipcar is going to embrace what the competition is doing. However, as long as Zipcar's membership rolls and usage continue to grow at a heady clip, it's clear that this growing market has room for plenty of driven competitors.
Shifting into gear
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The Motley Fool owns shares of Zipcar and Hertz Global Holdings. Motley Fool newsletter services have recommended buying shares of General Motors and Zipcar. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.