While some hipsters were bummed out by the idea of car rental giant Avis owning quirky car sharing innovator Zipcar, US regulators will probably approve the deal. That's what Reuters found out after conducting an informal poll of nine antitrust experts. While several of them feared loss of the lively upstart business, eight of the nine experts think that US regulators will approve the deal.
Zipcar and other car sharing providers have been popular with Millennial urban dwellers – from young, monied professionals who want to live car-free to broke college students who can get behind the wheel of a car for $11.25 an hour right in their neighborhood.
Ilana Preuss, a Washington community development advocate and Zipcar driver, speaks for this legion of car sharing fans. "My first reaction was concern because I have been very excited to see the significant growth of startups (like Zipcar and other car-sharing companies)," she told Reuters. "One nightmare would be they ruin the customer service of Zipcar, the friendliness of Zipcar."
Avis will be paying about $500 million in cash for Zipcar, which made up a 49 percent premium in the company at the time of the January 2 acquisition. If this acquisition is approved by federal regulators, Avis would take the lead in the $22 billion US car sharing market, over Hertz Global and Enterprise. Hertz and Enterprise dominate car rental market segments but have had limited presence in car sharing.
The Federal Trade Commission will probably review the Zipcar deal for antitrust concerns since it also looked at the Hertz acquisition of Dollar. But most of the interviewed antitrust experts don't expect Avis to face stiff regulatory headwinds. "I don't think there's any barriers to entry here," said David Balto, a veteran of the FTC and Justice Department now in private practice.