How often are Zipcars cleaned?

Car sharing services like Zipcar are growing, but is it a profitable business?

Scott Griffith from Zipcar and Frank Miller from Toyota in a Toyota Prius PHV

Given current fuel prices and the increasing difficulty of finding parking in most congested cities, the increasing popularity of car sharing programs is hardly surprising. In fact, the industry is becoming so popular that both individuals and automakers are taking action.

Additionally, just last month we saw Zipcar, one of the biggest car sharing outfits in the country, raise around $ 174 million in an IPO.

But is car sharing the way of the future? And is there really viable business here?

If you ask a representative in the rental car market, the answer you will get is that car sharing is still in its very early stages, especially here in the US, and it is unclear whether it will ever expand beyond its current niche status.

In fact, many in car rental see car sharing as just an extension of what companies like Hertz and Enterprise are already doing: offering people as a service to the people who want them.

It is clear that even the largest car sharing companies are at a loss. Zipcar, for example, had sales of just over $ 186 million in 2010 but ended the year with a loss of $ 14 million. Additionally, Zipcar is forecasting a loss in 2011 and it is unclear whether it will be profitable in 2012.

Another factor that affects the profitability of car sharing programs is the price of fuel and the propensity of consumers to pay more at the pump - which can be very volatile.

Only time will tell, but with fuel prices almost certain to go up and stay that way, we're sure there will be a lot more car sharing companies popping up across the country.

[GigaOM]

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