Zipcar

With Competition Looming, Zipcar’s Q2 2012 Revenue And Earnings Disappoint

Next Story

The Protean Echo Reduces All Of Your Credit Cards To One Ubercard

Zipcar is seeing increased competition in the car-sharing market, which is one reason that it might not be growing as quickly as it, or analysts, like. Zipcar reported second-quarter loss of $422,000 today, or $0.01 a share, compared to a net loss of $5.6 million, or $0.17 a share, in the prior year’s second quarter. The earnings came on revenues of $70.8 million, which is up 15 percent from $61.6 million in the second quarter 2011.

But Wall Street analysts expected the company to break even this quarter, with revenue rising 18.7 percent to $73.1 million. And Zipcar missed its own revenue forecast of between between $71 million and $74 million. Zipcar shares popped during the IPO, rising to nearly $30 a share. But ever since, they’ve been on a gradual decline, and closed out the day pre-earnings at 10:50. Zipcar saw its shares drop 6 percent in after-hours trading.

In addition to its GAAP earnings, Zipcar reported it now has 731,000 subscribers, which is up 21 percent from the 2011 second quarter. It recently launched Zipvan service in Chicago and Toronto, and also expanded into Austin, Texas, with 40 vehicles there. Zipcar reported that in its established markets — which include Boston, New York, San Francisco, and Washington, DC — revenues grew 16 percent to $39.8 million. But less mature markets didn’t fare as well, particularly Europe. Scott Griffith, Chairman and CEO, wrote in the press release:

“Despite these gains, we brought in fewer members than we had anticipated, and we faced economic challenges in our UK business. Moving forward, we are taking actions to maximize returns on our marketing spend, and we will be rolling out initiatives to accelerate adoption and expand our service offerings.”

The report comes as Zipcar faces increasing competition in the car-sharing segment. It’s coming under attack from local services like City Car Share, and is seeing startups like peer-to-peer car rental services Getaround and RelayRides pop up. Earlier today, Getaround announced that it was launching Getaway, a service that will let its member rent out their cars full-time, which could instantly give it a fleet of cars to compete with Zipcar in launch markets like San Francisco and Chicago. And RelayRides recently partnered with GM and OnStar to get more car owners sharing on its peer-to-peer marketplace.