Zipcar and Ford in deal on campuses

New York Times / August 31, 2011

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DETROIT - It wasn’t long ago that car-sharing services like Zipcar were perceived as a threat to the sales volumes of traditional automakers.

But Ford Motor Co. is taking the view that drivers who rent from Zipcar Inc. by the hour just might be potential customers down the road.

Ford and Zipcar are expected today to announce an unusual partnership in which the Detroit automaker will supply its vehicles to Zipcar locations on 250 US college and university campuses.

The two-year program will provide Zipcar with up to 1,000 Ford Focus sedans and Escape sport utility vehicles.

Ford will also offer the first 100,000 university students who sign up for Zipcar a $10 discount on the network’s $30 annual membership fee. In addition, Ford has agreed to subsidize $1 of the hourly rental rate for the first 1 million hours of use on any of its vehicles. The typical Zipcar rental costs $8 to $9 an hour.

The program, which starts tomorrow, is a significant step in the expansion of Zipcar, based in Cambridge, Mass., which went public with an initial stock offering early this year, and in August reported strong revenue and membership growth that exceeded Wall Street expectations.

The alliance with Ford will get more American cars into Zipcar’s fleet. Nearly all of Zipcar’s current models are foreign nameplates like the Honda Civic, the Mini Cooper, and Toyota Prius.