Hertz and Avis Get a New Competitor
By Jessica Skelly

(FORTUNE Magazine) – Maybe Hertz can afford to stay above the fray, but No. 2 Avis already recognizes the threat posed by car co-ops like the one just started in Eugene, Oregon. After forking over $250 in membership fees, co-op members chip in $15 a month for insurance. In return, they get the right to sign out a 1972 Volkswagen Beetle for 50 cents an hour, 15 cents a mile. Eugene is a good place to start a co-op: 28% of the city's workers commute via alternative transportation -- skateboards, bikes, car-pooling, nature walks. Treasurer Krystee Brumbaugh avers that she and the other four members are motivated by environmental concerns, not entrepreneurial visions. They plan to help other urban dwellers who want to start co-ops for sharing a few cars rather than owning a bevy of polluters. While this startup may be just accelerating, Europe's Stattauto, which began in 1988 with two rusty cars and an answering machine, now has 120 cars for 1,600 members in Berlin alone, and co-ops in other major cities including Vienna and Zurich. The company, which gave the Eugene quintet its operating manual, doesn't guarantee members round-the-clock availability. But they can rent by the hour, and women traveling alone after midnight don't pay hourly fees. Avis in Berlin has responded with a pilot car-sharing program that beats Stattauto on price. But founder Markus Petersen is unfazed. "We listen to our members because they are our customers," he says. "If we're only concerned with getting rich, you can be sure they will put us out of business."