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Racing Ahead in the Car-share Service Market

The popular car-sharing service Zipcar made its Asian debut last June when the company, a subsidiary of the US-headquartered Avis Budget Group, opened for business in Taipei.

Taiwan was reportedly chosen as the test-bed for the company's wider roll-out across Asia, given its relative lack of competition compared with a number of other territories, notably the Chinese mainland, and the general willingness of local consumers to test new ideas.

The Zipcar concept began life in Massachusetts back in 2000, differentiating itself from standard car-hire firms in several ways. Users have to sign up as members with fees starting as low as US$7 a month, while separate options are available for business users and those likely to use the service more frequently. Driving fees are, on average, between US$8 to US$10 an hour, depending on the exact location and car model.

Once approved, a member can check the local availability of vehicles via the Zipcar app or website. Cars can be reserved for any given period via the same app, which also allows for the pick-up point to be specified and any extension to the lease period to be arranged. Usually, the car has to be returned to the original pick-up point on a round-trip basis, although, in certain US cities, including Los Angeles and Washington DC, one-way trips can be booked, and the vehicle dropped off at an agreed location within the destination city.

Following its initial success in the US, the company in 2006 made its overseas debut in Canada. Five years later, in April 2011, it listed on the NASDAQ, the second-largest stock exchange in the US.

Its success attracted the attention of Avis, and the US$500 million acquisition of Zipcar was completed in March 2013. By September 2016, it was firmly established as the world's largest car-sharing network, with more than one million members and operations in 500 cities across North America and Europe.

Tough Competition

YouBike: a precursor of the Zipcar approach
YouBike: a precursor of the Zipcar approach (Photo: Shutterstock.com/asiastock)

In terms of its Asian aspirations, the company was initially deterred by the strengths of existing operations on the Chinese mainland. For an extended period of time, three operators – Didi, Kuaidi and Uber China – were engaged in a pitched battle for dominance of the sector, one that only really ended when Didi Chuxing took over Uber China in August last year.

Compared with the intense competition on the mainland, Taiwan was seen as offering a far less bruising entrance into the wider Asian market. The practice of bike-sharing, which has much in common with the Zipcar concept, was already well-established in Taiwan, with the total number of trips on YouBike, the market leader in the sector, exceeding 100 million by August 2016.

As well as its pre-existing sharing culture, Taiwan's shortage of car-parking spaces, coupled with the cautious approach being taken by the car-sharing businesses already operating on the island, all added to its appeal for Zipcar. In the case of Uber, the company got off to a false start in Taiwan, where it initially exited in February 2017 due to problems with its operating license and compliance with Taiwan's tax regime. While it resumed operations two months later, its credibility was affected.

Milestone Launch

Taiwan: the Asian test-bed for the high-tech car-sharing concept that has already wowed North America (photo: Shutterstock.com/Joshua Rainey Photography)

Speaking at Zipcar’s formal launch in Taipei, Massimo Marsili, the President of the company's operations in Europe, the Middle East and Asia, said: "Today marks a great milestone for Zipcar. Not only are we extending our operations into another world-class city, while helping to tackle congestion, it is also our first launch into the Asia-Pacific region. With that in mind, we particularly look forward to welcoming our new Taiwanese members to our wider network."

To date, Zipcar has some 30 car-sharing stations in the Greater Taipei area, mainly in and around the city centre and close to a number of university campuses. Members have also been promised access to a wide range of vehicles, including the Volkswagen Golf and the Audi A1, both of which are said to be ideal for shopping or seeing family and friends.

A number of small vans, such as the Volkswagen Caddy, will also be available for moving house or for other instances when more space is required. At the top of the range is the Volkswagen Sharan, said to be the ideal vehicle for transporting larger groups.

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Content provided by Hong Kong Trade Development Council
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