Avis Bought Zipcar

Avis bought Zipcar for $12.25/share. I've never used the service, but I mostly agree with Steven Pearlstein: How Avis will ruin Zipcar.

"The real issue in these deals is culture. Zipcar has a way of doing things that is particularly appealing to the young, hip urbanites who walk, bike and use public transportation most of the time and don’t own a car. They like the types of cool cars (Mini Coopers, Toyota Priuses) that Zipcar provides, the convenience of picking them up in their neighborhood and the very idea of “sharing” cars with people like themselves. Everything about the company — from its marketing to its customer interface to its rules — supports that brand identity.

The only way for Avis to realize its over-promised cost savings will be to force Zipcar to consolidate the two operations and become more like Avis in everything it does. Eventually, all the old Zipcar executives will be fired or will migrate somewhere else. Auto purchasing will be centralized, as will the pickup points. The Zipcar Web site and computer system will be merged into the Avis Web site and computer system. Avis will want to do package deals with airlines and hotel chains and drag Zipcar customers into its loyalty program. They’ll even try to upsell Zipcar customers every time they reserve a car: Wouldn’t you like something bigger for only $2 more? Wouldn’t you like extra insurance?"

I agree with the predictions in the second paragraph but wouldn't call them "culture" issues. Those are just typical failings of big mergers. As you integrate something new into something bigger and preexisting, there are lots of conflicts that need to be resolved (typically because the new use cases weren't taken into consideration when the initial systems were built). It's not culture or brand identity that causes those decisions to be made badly, its just bad management. Get this done instead of get this done right. Presumably Avis bought Zipcar because they thought they did some things better than Avis did (or they just wanted to kill competition) but the push will be to make the Zipcar systems work the Avis way. It will make things easier for the remaining employees and maybe even for some Avis customers, but not for Zipcar customers. It certainly gets harder to do right when all the new people leave or are let go because they're duplicating skills.