With no bad press over New Year’s Eve it looks like hire car service Uber avoided the surge pricing traps of 2011 and the good news continues for the online booking industry with the news that Avis is buying car sharing service Zipcar.
Assuming the acquisition isn’t another example of the greater fool investment model, Avis’ purchase of Zipcar makes good sense in expanding the hire car giant’s footprint into the share car business.
Regrettably Avis use the 1980s term “synergies” four times in their media release but it does seem the businesses are a good fit both in fleet sharing and improving both company’s services.
Zipcar’s technology is another asset which Avis can use, with the car sharing service’s ability to track vehicle locations meaning better fleet management for the hire car business.
Car sharing logistics
The logistics angle of car share services is something that’s been highlighted by Uber’s CEO Travis Kalanick at various times, most recently at the service’s Sydney launch last November.
Another aspect of the car sharing and hire car booking services is their Big Data advantages which the online startups bring.
Historically, car hire companies have been reasonably good at gathering data on their customers with loyalty schemes, direct mailing and plugging into airline frequent flier programs. However they have been left behind by the Big Data boom in recent years.
Companies like Zipcar, Uber and taxi hailing apps like GoCatch have big data in their DNA, having been founded in the era of cloud computing and social media they have access to more information and a better ability to use the knowledge they gather.
Predicting the price surges
At Uber’s Sydney launch Kalanick described how Uber’s traffic volumes increase in San Francisco when the Giants win a game, the interesting thing is that the surge happens three hours before the match starts.
Insights like the traffic patterns around football games and holidays are gold to a high inventory business like hire car services. They are also important to the entire logistics industry.
This latter point is probably the most overlooked part of all with the current rush into social and mobile based apps – the market intelligence that these services gather.
While it’s tempting to dismiss that market intelligence as just monitoring who likes cats or cheeseburgers, the application of that data is transforming supermarkets, airlines and even concert venues.
Avis seem to have understood that it will be fascinating to see how they will use Zipcar’s data and whether their competitors will figure out the importance of what these services offer.