Zipcar Asking Providence for Free Parking, Subsidies

Tuesday, March 11, 2014


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Zipcar signs at a private lot in Providence - the company is now seeking at least 13 unpaid spots from the city.

Zipcar, the car-sharing service which came to Providence in 2011 -- and was purchased by car rental company Avis Budget Group in 2013 -- is looking to formalize an agreement with the City of Providence that would provide them with a minimum of 13 free prime parking spaces in the city over the next three years, as well as municipal marketing and co-branding.

Contained in the proposal is a stipulation from Zipcar that "in consideration of the City providing 13 parking spaces...Zipcar will waive the annual membership free for up to 40 City employees that become Zipcar members during the term of [the] Agreement," which would be from 2014 through 2017. Zipcar will make no payment to the cash strapped Capital City under the agreement and the value to the car-sharing service is in the hundreds of thousands of dollars.

Providence City Councilman Bryan Principe said, "That requirement raises a flag for me. Now we're soliciting our employees -- about 4,000 of them -- and giving free advertising to a Fortune 500 company?"

"I have an issue with signing up city employees," said City Councilwoman Sabina Matos, noting, "We want to see any benefits from this go to the taxpayers instead."

Currently, Zipcar has a fleet of 70 cars at 30 locations across the city. A spokesperson from Mayor Angel Taveras' office did not return a request for comment on the proposal.  

See Zipcar Proposal HERE

The "Zipcar for Municipalities" Program Agreement was presented to the Providence City Council in a letter dated January 9 by Providence Director of Sustainability Sheila Dormody, and has been considered by the City Council Ways and Means Committee at two meetings since then.

According to Committee Chairman David Salvatore, it will be on next Monday's committee agenda. "Some committee members have outstanding questions that they'd like answers to," said Salvatore.

Preference for Brown, RISD and Johnson and Wales Students

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Brown University

In addition to requiring that the City provide "highly visible, dedicated, and reserved parking locations" at no charge to Zipcar, who could request additional spots to the 13 outlined in the agreement to "meet demand", the company said it would extend eligibility to "18+ employees and students of Rhode Island School of Design, Brown University, and Johnson and Wales" -- and residents of the local community that reside and or near the city that are 21+ that are Zipcars members that are "in good standing."

"The thing that gets me the most, if you're at Brown or RISD, you're 18, you're good," said Principe. "I called them on that. Say you have a high school graduate, who might be going to CCRI, or PC -- or a grad who's going to Stanford, but home on break. It doesn't make sense."

Principe continued, "Most of the Brown and RISD students aren't from RI. So it's good enough for out of staters, but not our own kids?"

Zipcar's Providence Presence

"When Zipcar launched in Providence in June 2011 we entered into an agreement with the city," said Zipcar Communications Coordinator CJ Himberg. "The agreement allowed us to expand on the programs we had established with local universities in the area (including Salve Regina University and Roger Williams University), and offer car sharing more broadly to residents in the city."

"Today, in addition the on-street locations we have a total of nearly 60 vehicles in more than 25 private parking locations in the Providence area," continued Himberg. "A new agreement will enable us to continue to provide on-street locations to members in the Providence area."

Saul Kaplan with the Business Innovation Factory, who penned the article Dear Avis, Please Don't Screw Up Zipcar, said, "Rhode Island should put up a sign at the border that says, Innovate Here. Zipcar is exactly the kind of innovative business model that should be encouraged and welcomed in Providence. Car sharing provides new affordable and sustainable transportation options to more of our citizens."

Councilman Principe acknowledged that while he had reservations with certain elements of the proposal, he was supportive of the concept of Zipcar. "I'll say straight out, I like Zipcar as a company. It's a good resource for people who don't have cars, or need another car," said Principe.  "I'm not against the idea of them, or the company itself. "

In 2013, Fortune Magazine listed Zipcar parent company Avis Budget Group at #350 on the Fortune 500 list -- up from #418 the year before.

"Am I open to this idea, and expanding its reach? Yes," said Principe. "But could it perhaps be another company, an upstart company willing to pay us, versus regulating the process."

More Concerns, Clarifications

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City Councilman Luis Aponte said that he was closely monitoring the proposal, and parking issues facing the city.

"One of the things we asked the City was how many cars in Zipcar's fleet are registered in Providence," said Aponte. "I was told by [City Internal Auditor Matthew] Clarkin last week that Zipcar paid $109,000 in property taxes in Providence last year."

Aponte pointed out that Providence had included parking spaces as part of an eleven year, $31.5 million payment-in-lieu-of-taxes agreement between Brown University and the city, which contained in the terms an extended lease of 250 city parking spots to Brown.

Clarkin noted that the maximum amount a metered spot in Providence can generate a year is $3,750 -- but that that Zipcar spaces aren't metered. "Maybe one is," said Clarkin, who said that the actual parking spot value in the city would depend on how long the spot was out of the city's control.

"That value to the city is if someone's paying for parking at that meter the whole day," Principle noted.

In Bend, Oregon, the National Main Street Center valued an on-street parking space at $30,000 in sales. Last June, reported the sale of two prime location parking spaces in Back Bay for $560,000.

"I like the concept of the Zipcar business model," said Matos. "Not everyone needs to have a car. My questions are around the fact that it is frustrating that Providence doesn't have enough parking spaces, and now we're looking at reserving street spaces for Zipcar."


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