Avis, Zipcar and the Next Big Wave of M&A
The reality is that
Zipcarsuffered from lack of capital, a need to expand abroad, and increased competition from Hertz ...
For entrepreneurs, the lessons are ... sobering. So many dream of the next Facebook or Airbnb, or yes, Zipcar. The odds say that the vast majority will fail. And even those that succeed often will do better in the hands of a bigger, if inglorious, owner.
Right. And, as TheStreet's Antoine Gara argues, all of this merger and acquisition activity in the broad travel sector could ultimately mean higher prices for consumers.
I'm not sure I agree. Because I don't own a car, I rarely think twice about it, but the cost to borrow a Zipcar or rent elsewhere is already high.
When I need wheels, I rent them. No matter the cost, I'm not leaving the counter. Fifty bucks for 24 hours a few times a month beats the heck out of a monthly car payment, gas, insurance and maintenance just to move my four-wheeled ball and chain from one side of the street to the other twice a week to avoid street cleaning tickets.
Consolidate away. Charge me more. I don't care. I'm one of the saps happy to pay for comfort and convenience.
The same goes for cable and satellite. I'm tired of this I cut the cord nonsense. If you watch sports at all, you have not cut the cord unless you're content spending 40 hours a week sitting on a bar stool.
What's this have to do with Avis, Zipcar and M&A? A lot. If you think we have seen a lot of consolidation in the travel space, wait till the media boys start making deals. The consumer might even benefit from these inevitable hookups.
Several companies have no choice but to sell. Others have no choice but to expand.
Consider Viacom (VIAB) .