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For those of you unfamiliar with Zipcar, I'll tell you that it's a 'car sharing' service (it's also sometimes called a car club). The idea is a good one though it seems pretty complicated logistically. They buy a fleet of cars and then lease spaces and keep the cars in throughout a city like Boston (where I live). The cars can be rented by the hour or for a 24 hour period. Zipcar is responsible for all costs related to the cars, including gas. Members pay just the rental rate. (There are also some other fees associated with the service, for example there is a yearly membership fee.) According to their website, the service is currently available in:

Atlanta, Boston, Chicago, London, New York, Philadelphia, Pittsburgh, Portland, San Francisco, Seattle, Toronto, Vancouver and Washington DC.

So, what's are the differences between Zipcar and a traditional car rental service?

• The flat fee which includes gas
• Cars are scattered throughout a city instead of being kept at a small number of rental sites. The idea of course is that there should be a car available right in your neighborhood.
• The experience is quite a bit different. Cars are reserved online and can be picked up simply by using holding the membership card up to a sensor on the car itself.

There is a lot to like about the service. This is one of those ideas that, had I been approached with it, I may have dismissed as overly complicated logistically, difficult to promote etc. To Zipcar's credit the service does run pretty well. That's the good.

The bad is Zipcar the company, and the people doing the decision making on behalf of the company (and of course all of its members). The primary way that the company communicates with its members is by email. Usually these are intended to be cheerful newsletters. But frequently they are laced with some bit of bad news. The relationship is not unlike one you might have with a friend who you're happy to see but who frequently shows up only when she wants to borrow money or to ask you to watch her cat or something.

Anyway, Zipcar sent out another email today, announcing another rate increase. I thought I'd share it with you. As I state in my reply it's not the pricing that bothers me, it's the way that the structure the pricing for the service. Once upon a time rates were pretty consistent. As they've increased rates over the years, they've started to choreograph them in such a way as to give the impression of value without the actual value. I don't like it when companies treat their customers as if we're stupid. It's insulting to those of us who aren't stupid, and of course unfair to those of us who are in fact too stupid to avoid being manipulated into spending more than we might have anticipated. I don't like being made to feel as if I could be spending less but I'm choosing to spend more. Because I don't believe that is actually the case. I can't take a weekend trip to the Cape in the middle of the work week for example. For that matter I can't spend a day running errands while I'm working either.

What follows is my reply followed by the email from Zipcar. I'll post whatever response I get from Zipcar if any.

My reply

Can you explain to me why, if the new rates are motivated by gas prices, the rate increases are more on the weekends? This does not reflect movement in gas prices.

As a member for many years I can understand that an increase in costs necessitates in increase in rates. I don't appreciate what would seem to be a convoluted rate structure engineered to guide members toward costlier rates while giving the impression of affordability.

It would seem obvious that the majority of your members are not in control of their weekday schedules because we are working, in school, or otherwise occupied. Of course, I don't have access to data related to usage of the service but clearly weekends are periods of high demand for both hourly and 24 hour reservations. The weekday rates would seem little more than a pretense.

In regards to the $7/hr hybrids, obviously these amount to only a small fraction of the cars available. Because of the dramatically reduced rates they are frequently unavailable. Of course they aren't eligible for 24 hour reservations at all. The rates for other cars range from $9.75 to $13.75 under the new rate schedule, which is 39% to 96% more than the cost of a Prius. With differences in rates as dramatic as this, I'm sure most of your members would have preferred that you had purchased more hybrids. Of course decisions like these are out of our control. Unfortunately, it means that we are frequently unable to take advantage of the low rates for these cars. But that's the plan isn't it?

If these new rates are in response to an increase in the cost of gas, then explain to me why they are not distributed across all of the vehicles in the fleet and consistent regardless of the time of the reservation. After all, hybrids use gas too and the price of gas is the same on weekends and during the week. Of course gas prices do fluctuate but not according to this pattern. In fact if the people responsible for setting the price of gas tried to artificially increase the weekend price it would certainly be a cause for alarm and outrage.

You should know that I no longer recommend Zipcar. What's important for you to consider is that my change in attitude has nothing to do with the price of the service and instead is exclusively the result of this sort of disingenuous treatment of members. In my opinion, this is not the best way to insure the long term viability of your business.

Rob Reed

The email from Zipcar

Gas price increases over the last few months have forced our hand, and we need to make adjustments in order to keep up. We thought it was important to tell you up front.

The truth is that the jump in gas prices is unlike anything we've ever seen. It's affecting commuters, travelers, and even your neighborhood car-sharing company. We tried to minimize price increases wherever possible, especially during the week when our cars are typically driven shorter distances (and as a result use less fuel).

As of Monday, August 18th, the rates will look like this:

• Weekday hourly reservations increase by $0.25 per hour and 24-hour weekday reservations will increase by $4 for BMWs and convertibles only.
• Weekend hourly reservations increase by $0.75 per hour and 24-hour weekend reservations increase by $5-9, depending on the vehicle type.
• The incremental mileage charge (i.e. fee for miles over 180 per day) increases by $0.10 per mile.

As for the good news, our entire fleet of hybrids (more than 40 vehicles) continues to help us offset the cost of gas, so we're keeping those rates at $7/hr.

Zipcar continues to be a great value compared to owning a car, and we are committed to continuing to explore ways to keep our prices low. Our membership community has always been a source of support and ideas, and we are interested in hearing from you. Send us a note at info@zipcar.com anytime.

Your support means a lot.

Thank you,

Dan Curtin General Manager, Boston