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Enterprise acquires PhillyCarShare

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Enterprise Holdings, owner of Alamo National and Enterprise Rent-a-Car, has acquired PhillyCarShare, a non-profit car-sharing service in Philadelphia.

Keeping true to its slogan that "We'll pick you up," Enterprise Holdings -- owner of Alamo, National and its namesake car rental service -- has acquired non-profit car-sharing service PhillyCarShare of Philadelphia.

Financial terms were not disclosed.

The move is no doubt in response to rival Hertz's moves to build a national car-sharing service called "Connect," and gives Enterprise more than 13,000 members in the nation's fifth-largest city.

The company says PhillyCarShare will operate as "a natural extension" of the "Enterprise home-city business model," which already includes the company's own WeCar car-sharing service. It will keep its name, but become a profit-seeking company.

The Philadelphia Inquirer reports that PhillyCarShare was facing $2.7 million in back taxes and penalties; the deal relieves some of that pressure while limiting Enterprise's liability.

The acquisition also tacitly suggests that WeCar is having difficultly making inroads in established markets where ZipCar or a local alternative exist -- and that if you can't beat 'em, buy 'em.

PhillyCarShare executive director Gerald Furgione had this to say:

In the last decade, we have successfully worked tochange the way Philadelphia businesses and residents think about sustainable transportation options. Now PhillyCarShare will have the necessary resources and economies of scale to operate efficiently and effectively as the car-sharing marketplace continues to evolve and becomes even more competitive and user-friendly.

It remains to be seen exactly what "economies of scale" add up to for a single-city car-sharing service (Update: Enterprise says there's savings to be had in vehicle acquisition and servicing activities), although Enterprise did say it would expand its PhillyCarShare fleet "as quickly as possible."

Anecdotally, Philadelphia is dominated by two services: ZipCar, which operates primarily in the downtown Center City area; and PhillyCarShare, which tends to stretch further into gentrifying (vs. gentrified) neighborhoods for customers.

Is consolidation the way to beat ZipCar? And what's in it for customers, besides potentially higher prices? (After all, car sharing services are inherently local; it doesn't help the customer too much if there's a similar service in another metro area. On the other hand, increased competition helps bring prices down.)

It remains to be seen, but there will no doubt be a lot of action in this space. Stay tuned.

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Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure