Zipcar Sells Out To Avis For $500 Million: A Bad Sign For Innovation

Zipcar is the Apple of car rental services. Like other nimble disruptors (think Square, Uber) Zipcar "just works" in a way that competitors are light years away from matching. But while Apple's massive success has reinforced its winning formula, some other less-patient disruptors are looking for the door. Today's news that Avis will buy Zipcar for $500 million is not only bad news for loyal Zipcar customers (myself among them), but an unsettling message from an industry innovator turned sell-out.

Zipcar Vs. The Miserable Industry Standard

If you haven't used Zipcar, it's impossible to convey just how pleasant renting a car this way is when pitted against the traditional car rental experience. In participating cities, Zipcars are sprinkled in parking lots and other locations across town. To rent a Zipcar, you need only your smartphone and a member card, which lets you into a car after you've reserved it. You take it out for the time you reserved, get it back on time and park it right where you left it.

Take this anecdote: Just before Christmas, I'd planned to visit Bend, Oregon - a little over three hours from my home base in Portland. Realizing that the car we planned to take out of town might not make it through the snowy mountain pass that keeps rainy Portland at arm's length from the high desert, we decided to rent a car for the same day. I scoured three simultaneous travel search aggregators (Orbitz, Kayak, Expedia), tested a handful of hit-or-miss Retailmenot.com coupons and made a handful of calls to numbers that mostly redirected to automated national car rental 1-800 hotlines. After more than an hour of searching, I landed an online reservation that sounded like it would work - a compact car for about $40 a day. I could pick the car up in about an hour. When I called the local office to confirm the reservation, I learned not only that the rental location had literally zero cars to rent out, but that the guy who answered the phone had no intention whatsoever of calling to loop me into that bit of knowledge. 

Beyond frustrated, I loaded Zipcar's website, picked a truck that looked like it could handle winter weather and confirmed my reservation - the entire process took five minutes. I'd initially planned to rent through a traditional rental agency (Avis, Enterprise, Budget - much like Android phone manufacturers or PC-makers, they're all the same to most consumers) to save money, but factoring in the cost of gas on a 324-mile round trip, the included insurance and the time it would take to book another reservation, it no longer seemed worth it. At that point I was thrilled to pay more for a Zipcar to avoid the headache of a traditional car rental exchange - just like I'm willing to pay a premium on a Mac to get a reliable, virus-free computing experience in an elegant package. And I could have even done it, maybe even faster, on my phone. Disruption at its finest. 

R.I.P. Zipcar: 2000 to 2013

It remains to be seen if Avis has plans to rebrand Zipcar, but it certainly shouldn't. As well-established as it may be, many people hate Avis (and its competitors) because it's a car rental company, just like many people hate all airlines and credit card companies. Rather than using its dated, inherently flawed industry know-how to suffocate Zipcar's disruptive vision, Avis should instead remodel itself around the upstart. It's an opportunity to prove that people don't have to hate the kinds of companies that we've come to hate. But considering that Zipcar made $3.9 million in 2011, compared to Avis's $5.9 billion, don't hold your breath. 

If you're a cool, disruptive tech company looking to get cash out via a lucrative buyout, you better hope that your new mothership won't run you into the ground for lack of understanding your innovative model. Unless you plan to stop caring as soon as you have the cash in hand. Maybe you're convinced that you can remain intact under your new banner, or that you'll be able to revolutionize things from the inside out. And hey, Google built itself into what it is today by acquiring smart startups across wide swath of industries (imagine if Google had snagged Zipcar to build out its crazy vision of smart cars) - but Avis is about as un-Googly as it gets.

Beyond seeing a growing threat to its clunky, outmoded business model, maybe, just maybe, Avis sees the potential to turn its own miserable industry on its head. If the company is just trying to neuter a threat to the awful experience of renting a car today, it'll be a damn shame. Zipcar, like other companies rethinking transactions and businesses that more and more people are coming to loathe, was poised to change the industry altogether - and it had been playing the long game since 2000.

I'm sorry to see it not stay the course.