Corner-kicked

Hertz dumped for Zipcar as city’s car share operator

Hoboken’s Corner Cars program – in which 42 cars are placed on the streets for people to use at an hourly rate – will continue, but within four to six weeks, it will be run and furnished by Zipcar rather than Hertz.
The car share competitor, which already has 26 vehicles in Hoboken, will take over Hertz’s dedicated parking spaces and hopes to add four more. The new contract was approved by the City Council this past Wednesday.
Zipcar has a higher minimum hourly rate than Hertz and requires a membership fee, but current Corner Cars users will be able to waive the fee for the first year through a special promotional deal.
Zipcar will pay more to the city in rent for its dedicated spaces. Hertz paid $100 per month per spot, whereas Zipcar will pay $150 (interestingly, when Zipcar bid for the original Corner Cars contract in 2010, it offered to pay $225 monthly per spot).
The new deal could also provide a crucial lifeline to Hoboken’s hopes of rolling out its bike share system this summer (for more on this issue, see last week’s issue of The Hoboken Reporter). As part of its bid for the Corner Cars contract, Zipcar offered to buy one of the two-year, $100,000 sponsorships currently being offered by the city as a way to raise the $1.5 to 2.5 million needed to launch the program.

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“Each of these spaces on the street is less than what a resident would pay in our garage.”–Michael Russo
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The sponsorship will underwrite 50 bikes within the system, each of which will bear Zipcar’s logo. City spokesman Juan Melli could not confirm that the tranche would be enough to get the bike share rolling this summer, but he said the city had made good progress in financing the program and was in the last stages of finalizing sponsors.

Puzzling over the price

Some members of the City Council argued that the city should be receiving more money for each of the carved out parking spaces used by the Corner Cars program. The devoted spots are all on the visitor parking side of the street, which will gradually become metered parking over the next year.
“Each of these spaces on the street is less than what a resident would pay in our [municipal] garage,” said Councilman Michael Russo, “and this is a for-profit entity making a lot of money on the service.”
Council President Ravi Bhalla disagreed, saying that a 50 percent increase over the current rent for the Corner Cars spots was “very substantial.” In addition, noted Councilwoman Jennifer Giattino, both Zipcar and the other bidder for the Corner Cars contract, Enterprise (which has a few cars in town too), included the same monthly rent of $150 in their bids. Zipcar offered significantly more in terms of financial support for the bike share program.
The contract was ultimately approved by a vote of five to three, with council members Michael Russo, Theresa Castellano, and David Mello in opposition and Councilwoman Beth Mason absent.

What happened to Hertz?

The most surprising part of the City Council’s decision to award a new contract to Zipcar isn’t how abruptly it came about—it’s how long the program was operating without a contract until now.
Melli said Hertz has been operating the Corner Cars program without a contract for over a year, though he could not provide the exact date its agreement expired. The Hoboken Reporter was unable to find any indication that the City Council had ever extended its contract with Hertz beyond its initial two–year trial period, which ended in April 2012.
Somewhere along the way, said Melli, Hertz seems to have lost interest in its Hoboken carsharing program. The firm did not submit a bid for the new Corner Cars contract when a request was put out earlier this year, leaving Zipcar and Enterprise as the only candidates, he said.
According to both Melli and several councilmen who spoke this past week, the lack of an agreement between Hertz and the city had begun to show. Residents complained of unresponsive customer service, and Melli said the city was receiving incoherent and inconsistent data from Hertz about the system’s usage.
That data is crucial because the Corner Cars model is predicated on the idea that more cars will be removed from city streets due to residents joining the program, making up for the lost parking spots.
In the Hertz program, residents pay an hourly rate that includes insurance and gas. The rate has ranged from $5 during certain weekday promotions to more than $15 at peak times. Residents reserve the cars online, sometimes immediately.
In April, Melli said he believed the program had worked, noting that the number of residential parking permits in Hoboken fell by a whopping 2,600 from 2009 to 2014. However, Melli was unable to provide more recent Corner Cars usage statistics than a year and a half ago, in January 2014.

Carlo Davis may be reached at cdavis@hudsonreporter.com.

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