BOSTON — Being the nice guy doesn’t get you headlines, but it can build a solid business.
Take Zipcar. When we talk about ride sharing, the 15-year-old company is rarely mentioned. Launched before the sharing economy existed, Zipcar offers a subscription car rental service to people who live in urban areas and need cars every once in a while but don’t want to buy one. Today, the company has a fleet of over 10,000 cars operating in 31 cities and over 900,000 subscriptions to its service.
The company has taken a slower, steadier, and arguably friendlier approach than ride-sharing giant Uber: Zipcar has focused on working with cities to grow.
“One of the things that Zipcar did really, really well was forming relationships with cities,” said Brian Harrington, Zipcar’s CMO, speaking today about marketing strategies on stage at VentureBeat’s GrowthBeat Summit. “They love it when Zipcar comes to town because there’s a quantifiable reduction of pollution and congestion.”
By contrast, Uber has made a lot of enemies on its rapid road to success and a potential $50 billion valuation in only five years. The company is persistently stoking the ire of taxi unions and local governments around the world. Yet, by pissing people off, Uber has managed to launch in over 300 cities. However, like Zipcar prior to its acquisition by Avis, Uber is reportedly losing money. (Its undoubtedly high legal fees can’t be helping.)
Zipcar isn’t the only nice guy in the space. BlaBlaCar, a ride-sharing service out of Europe that touts 9 million users and $100 million in venture capital funding, keeps taxi unions and governments at bay by making sure that drivers and riders share fuel costs, rather than allowing the driver to post a profit. And cab-hailing service Hailo works with taxi unions and local governments ahead of launching in a particular city. This means slower growth — Hailo has only launched in roughly 20 cities worldwide. It’s also not always successful. Hailo had to exit North America last year, because local governments and taxi unions were unwilling to cooperate and it was paying an unsustainable amount of money in legal fees.
But Zipcar may have been able to make it work. The year after it was acquired, it reversed its losses, and in Q1 of 2014 the company reported $4 million in net income. Since then, Avis has said that Zipcar is driving growth at the company.
It may not be as sexy as Uber, and the dollar amounts are certainly lower. But the nice guy approach may end up being more lasting. And wouldn’t it be refreshing to have the nice guys finish first once in a while?