Saturday, April 07, 2007

Driven by demand, Flexcar expands its fleet

Seattle Times business reporter

Flexcar executives might be the only people in Washington excited about rising gas prices.

Drivers' frustration with gas prices, traffic congestion and parking are driving the car-sharing company to almost double its fleet of local cars, Flexcar executives said Friday at a Seattle news conference.

The company will add 200 more cars in the Seattle area by the end of this year, bringing its total fleet to about 350 after it retires about 50 older vehicles. Flexcar has also expanded to Philadelphia, its 11th market.

Flexcar says it's profitable in some markets but the entire company is not.

It faces strong competition across the U.S., particularly from a small number of companies that compete in the same markets, like Zipcar. That company operates across the U.S. as well as Canada and in London, and says it has been profitable in all of its markets since 2004.

There's also been a surge of nonprofits in the U.S. that offer similar services.

"There's nothing wrong with cars — there just might be a way to have a better relationship with your car," said Jamie Cheney, general manager in Seattle for Flexcar.

People — and businesses — that pay for Flexcar's services reserve a vehicle in advance and then pick it up at one of many locations across the region.

The standard hourly rate is between $7 and $12 for drivers who use Flexcar infrequently and aren't on a monthly plan. Monthly plans range from $75 to $700 and reduce the hourly rate. All plans include the cost of gas and insurance.

The privately held company is owned by Revolution Living, an operating unit of America Online co-founder Steve Case's investment firm, Revolution LLC. Flexcar's executives are in Washington, D.C., and its corporate office is in Seattle.

The company, founded here in 1999, has seen "double-digit" revenue increases in the last year, spokesman John Williams said.

Flexcar wouldn't disclose the cost of its expansion, or any financial information. The Seattle Times reported in 2005 that it had raised $20 million in private investments since its inception.

That figure doesn't include the money that was pumped into the company by Revolution, which has funded Flexcar's recent growth.

The company has 20,000 members in Seattle, including about 2,000 business accounts — one of Flexcar's faster-growing segments.

In the last year and a half the company has almost doubled the number of markets it serves, and executives say they are looking at several additional markets.

Companies like Flexcar can be successful serving a niche market but will likely have a hard time reaching a broad consumer base, said Patricia Mokhtarian, a University of California, Davis, engineering professor and faculty associate at its Institute of Transportation Studies.

Mokhtarian compares car-sharing with telecommuting — some people have the desire to stay at home and work, but often the logistics don't work out.

"It's great for those people when it's appropriate. It just doesn't end up being a preferred alternative that much of the time," she said.

Kirsten Orsini-Meinhard: 206-464-2391 or

Copyright © 2007 The Seattle Times Company

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