Enterprise Holdings, the world's largest car rental company, announced Wednesday that it is purchasing Toronto carsharing company AutoShare CarSharing Network.
In 1998, AutoShare became Toronto's first carsharing company. Today, it has more than 12,000 members. Despite being purchased by Enterprise it will continue to operate under the Autoshare brand.
"This acquisition reflects our longtime commitment to offering sustainable transportation options throughout North America," said Ryan Johnson, assistant vice president at Enterprise, in a press release. "We are very excited and proud to become part of Toronto’s car-sharing community, which AutoShare launched and has supported for more than 15 years."
But the move will be just one part of Enterprise's larger venture in carsharing. The company runs its own carshare system, Enterprise CarShare, which is available at 75 college campuses, 40 government and business campuses and about 20 urban markets. Enterprise also owns peer-to-peer ridesharing services Enterprise RideShare and Zimride.
Last year, Navigant Research estimated that carsharing revenue was roughly $1 billion and expects that figure to grow to $6.2 billion by 2020. The number of carshare members worldwide is expected to grow from 2.3 million in 2013 to 12 million in 2020.
Those revenue figures are only a fraction of rental car revenue in the United States alone. So why are car rental companies investing in carsharing?
While car rental and carsharing might seem like basically the same operation, the attraction of carsharing services is that they trend to attract a younger, more urban customer.
Ronald Nelson, Avis Budget Group chairman and CEO said that was a major reason his company bought the popular Zipcar brand last year: "By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs."
With millennials avoiding car ownership, that will be an important demograhic for car rental companies to attract.