Zipcar and Flexcar announce merger

Car club companies Zipcar and Flexcar today announced they are to merge as part of a deal the combined operation said would bolster its competitiveness in the fast expanding car sharing market.

The deal is being positioned as a merger, but it appears that Zipcar has acquired its smaller rival with the company confirming the expanded operation will retain both the Zipcar name and chairman and chief executive Scott Griffith.

Griffith said that the move would help underpin Zipcar's expansion plans in the US, Canada and Europe. It already operates in London.

"This merger will be a classic example of the whole being greater than the sum of its parts," he said. "We believe as a combined company, we will be more effective in making car sharing a mainstream form of transportation."

Flexcar chief executive Mark Norman, who will assume the roles of president and COO of Zipcar once the deal closes, hinted that with the two companies previously only competing in San Francisco and Washington DC, the integration of the two firms should prove relatively smooth.

Car clubs, whereby users reserve a vehicle online or using their phone as and when they need it and then access the cars located around metropolitan areas using a smart card, have grown in popularity in recent years as city dwellers realise they present a cost-effective and environmentally friendly way of making car journeys.

Zipcar said that with this growing demand prompting increased competition – particularly from conventional hire car companies looking to address the market – the deal would give the company "a stronger base from which to compete".