If Zipcar lost 80% of it's on street parking, doesn't that tell us tht Zipcar didn't place the highest bid on these spots because it thought it could obtain spaces at a lower cost elsewhere? I.e., With the free market at work, the company is incentivized to use the least cost resources ... Leaving the higher cost resources (i.e., the more visible on street spaces) for startups in this market who need the exposure (i.e.. think 'advertizing') which on street parking brings?

by Lance on Oct 6, 2011 8:48 am  

P.S. Lydia DePillis' recommendation for a 'regulated monopoly' sounds more like what's at work in the Russian Federation and China, than the true free market we espouse in this country. She's basically saying 'let the big guys get a monopoly to make lots of money without really trying ... as long as they agree to put in place the things that I, benevolent all knowledgeable person that I am, think they should do in terms of social goodness. Sorry, Lydia, the free market knows better than you what people really want. Get out of its way and let it function on it's own. We'll all be better off that way.

by Lance on Oct 6, 2011 8:55 am  

Because certainly nothing else in the country dealing with infrastructure is allowed to function as a monopoly.

Market solutions are not an end of themselves. Its a tool to acheive a solution.

by Canaan on Oct 6, 2011 9:09 am  

Because monopolies are only put in place when it is not possible to have a market functioning to shift through what is both wanted by consumers and affordable to consumers. But runs counter to the desire of the enlightened few among us who know what is best for us all and want that monopoly so that their should be's can occur ... even in the case where as here a competitive market can function ... and thereby let the consumers be in charge instead if the regulatory do gooder.

by Lance on Oct 6, 2011 9:21 am  

Ok...so what exactly is the relevance to mentioning that the new hospital won't be on metro?

Should we build another hospital near Shady Grove just because it's on metro? The hospital is necessary to serve the needs of people living in the area. Part of the reason that a new hospital was proposed in this area is it isn't adequately served by the existing hospitals in the county.

Prior to the stand-alone emergency room opening in Germantown a few years back any upcounty resident would have needed to drive to Rockville for emergency services. Granted this isn't a huge distance but if time is critical or it's the middle of rush hour that distance could make all the difference.

I love Greater Greater Washington and its analysis but you guys need to acknowledge that not everyone lives within the beltway, on metro or has the means to do so.

PS-
The hospital would end up only a mile or so away from the proposed CCT station for Germantown and would have frequent bus service not only in the future but as currently served by the Germantown Transit Center.

by Anon on Oct 6, 2011 9:22 am  

I agree with the critiques of the idea of a regulated monopoly for car sharing, but the thing is, Lydia's not really advocating a monopoly. She really shouldn't have used that phrase because it's confusing people. For instance, Stephen Smith's ATM analogy is spot on. We don't want the government telling every bank where it should have ATMs. But, what Lydia's talking about wouldn't translate to the government telling every bank where it should have ATMs, it's more like Metro giving one contract to Capital One to put ATMs in the stations.

Maybe she's still wrong, but if she had just used an expression like exclusive concession contract instead of the inaccurate monopoly term, people could have focused better on what she's actually talking about.

by TM on Oct 6, 2011 9:31 am  

@TM. VERY good point. And I bet that even if offered an exclusive concession contract at the prices these spots went for that Zipcar would have turned it down. Zipcar has established itself in this city. The additional cost involved in acquiring these curbside spots are true market cost most likely isn't beneficial to them ... because they don't need the advertizing value of them (anymore.) Note that even today the bulk of their cars are NOT park curbside. The issue of parking cars curbside was never about convenience for the user ... it was and is still all about ADVERTIZING. And Gabe Klein accomplished quite a coup in getting his company all this free adveritizing for so long. Now, that advertizing is more needed by a startup than it is by Zipcar ... hence why Zipcar passed on the opportunity to even bid on the spots (if read the article right). It doesn't need them ... And despite what Lydia thinks, Zipcar isn't in business to satisfy her social do gooder needs or anyone else's. It's in business to make money ... and it has made a business decision not to buy the advertizing that these spots provides. It's simple as that. Now 5 years ago, I bet they would have paid dearly to rent those spots ... but they didn't need to ... DDOT gave them to them ...

by Lance on Oct 6, 2011 9:41 am  

Lance,

But you dismissed the idea offhand because it wasn't market based. We shouldn't laud something because its market based we should laud it because it works, its still impossible to tell but lets wait and see what the results are.

by Canaan on Oct 6, 2011 9:46 am  

@Lance; as usual, you are just plain wrong:

"Zipcar isn't in business to satisfy her social do gooder needs or anyone else's. It's in business to make money"

Please provide any evidence of this. As far as I can tell, zipcar consistently likes to LOSE money.

@TM; "exclusive concession contract" -- you mean, like the Tourmobile? That worked out well.

IT is a shame there isn't a way to internally charge CABI for taking street parking spots. Yes, it is just shifting money around -- but there is a revenue loss when you replace a meter. This auction sets a good baseline.

by charlie on Oct 6, 2011 9:49 am  

""Zipcar isn't in business to satisfy her social do gooder needs or anyone else's. It's in business to make money"

Please provide any evidence of this. As far as I can tell, zipcar consistently likes to LOSE money."

They're a publicly traded company. They have a legal obligation to their shareholders to maximize profit.

by Mike on Oct 6, 2011 10:03 am  

I'm with Anon regarding the Germantown hospital. There's not even a real hospital for the 80,000 living in Germantown. Are we supposed to not build a hospital there just because there's no Metro? That is a ridiculous, nonsensical statement from GGW. People who don't live near transit are people too.

by klai on Oct 6, 2011 10:06 am  

Don't mind me, but isn't advertising spelled with an 's'?

On topic, the new legistlative districting plans O'Malley has proposed are rather strange. I'm not too sure about the supposed racial tinge to it, but it sure is marginalizing some group - rural GOPers.

by anon on Oct 6, 2011 10:08 am  

@Charlie
Yes, much like the Tourmobile situation. But the problem with the Tournobile agreement was that it didn't need to be exclusive and it was keeping out different services. Some exclusive concession agreement are good, some are bad. I don't know if a car share one would be good or bad, but simply saying one such agreement was bad doesn't mean all such agreements are.

And this auction does not set a baseline for the value of an on street space in all situations. It says what some companies offering carshare will pay. It doesn't say what, for example, some individual would pay to have exclusive rights to park there, or for a vendor to set up a food truck or whatever. The value of an on street space is largely defined by what use you allow or prohibit.

And I can easily flip your comment around and say it's an utter shame how much revenue the city loses by not charging congestion pricing. Such revenue would be many magnitudes higher than the small amount of meter revenue lost to the few on street bike share stations.

by TM on Oct 6, 2011 10:17 am  

@Mike; you mean, like this:

http://ir.zipcar.com/financials.cfm

"We have experienced net losses in each year since our inception and as of June 30, 2011, we had an accumulated deficit of $77.3 million. We expect to incur a net loss for the full year in 2011. We do not know if our business operations will become profitable or if we will continue to incur net losses in 2012 and beyond. We expect to incur significant future expenses as we develop and expand our business, which will make it harder for us to achieve and maintain future profitability. We may incur significant losses in the future for a number of reasons, including the other risks described in this Quarterly Report on Form 10-Q, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events. Accordingly, we may not be able to achieve or maintain profitability."

by charlie on Oct 6, 2011 10:17 am  

@TM; oh, I was just joshing you. The difference is between public entitles and private ones.

I'm really not sold on the idea as car sharing as a natural monopoly, or network. There is room for different models, and I dont' think zipcar is really that good. Perhaps there is a way to create a public insurance program -- car insurance for non-car owners -- which would make it easier to that type of lifestyle to thrive.

by charlie on Oct 6, 2011 10:28 am  

I don't see a justification for a regulated monopoly.

We know monopolies are generally bad.

We use regulation to limit their harmful effects when not having a monopoly is infeasible or highly inefficient, such as for utility services where it does not make much economic sense to have multiple gas/water pipes to each house.

But we've learned long ago that it is better to have competition when possible than to have a regulated monopoly, because regulated monopolies usually have poor customer service, higher prices, and incentives not to run their business to benefit consumers.

So, no, auctioning the spaces makes much more sense. If there's an argument to be made for not auctioning them, it must include giving the spaces away free to potential entrants, just as they were given away to Zipcar, in order to stimulate competition.

by ah on Oct 6, 2011 10:53 am  

I dont' think zipcar is really that good

I liked Flexcar better. The model was more simple. One type of car, and one price. Zipcar made it all way too complex with different cars and different pricing.

by Jasper on Oct 6, 2011 11:10 am  

The problem with Zipcar is that it's too expensive. The penalty for late returns means that you have to rent everything for an extra 30 minutes for all but the smallest of errands. I can walk to the grocery store and take a cab back, and it costs substantially less than a 1.5 hour Zipcar rental.

Also, Zipcar is a poor choice for one-way trips. If I want to go to my friend's place in the suburbs for a party and crash on the couch overnight, I can do that easily with my own car but I can't do that with Zipcar.

The access to pickups is nice, but U-Haul rents those out for cheaper.

As you might have gathered from the rest of this post, I solved these issues by getting my own car and canceling my Zipcar membership.

by Phil on Oct 6, 2011 11:45 am  

@Phil

The penalty for late returns is necessary. How else would their reservation system work? If I reserve a car right after you, and you're late - then I'm stuck.

by Alex B. on Oct 6, 2011 11:55 am  

I'm another person who is uncertain of the relevance of the distance of the Germantown Holy Cross hospital from the metro. This is a hospital. Do you only get to be close to a hospital if you are also close to Metro?

Not to mention that the Holy Cross site in Germantown is actually less sprawl-y than the Adventist site in Clarksburg would have been. The Holy Cross site is surrounded by already-existing development and is only a few miles from the Germantown Transit Center. The Adventist site is a greenfield.

by Miriam on Oct 6, 2011 12:17 pm  

@Phil - No doubt there are limitations, but if you need a car to crash at your friend's place, Avis, Enterprise, etc. can help you. The problem is if you want to crash at your friend's place, that means someone else can't use the car you have. Why shouldn't you pay for that "use" even though you're not driving it?

by ah on Oct 6, 2011 12:34 pm  

Re: hospital

People are forgetting that hospitals require a large number of employees, mostly administrative staff, that have to get to work somehow. As a former hospital employee, I can't tell you how inconvenient it was to have to take a shuttle from the metro to my job. Sure, hospitals are first trying to serve their communities, but their support staff needs to be satisfied too.

by Max D. on Oct 6, 2011 12:34 pm  

I'm not arguing that Zipcar's policies make no sense. They do make sense in the context of their business model. But there's no question that the policies make the service less useful to consumers. Again, let's take the grocery shopping case, which is a classic use case for Zipcar. Here's what a consumer can do now:

1. Walk or bike to the grocery store and bring a grocery cart or panniers. Total cost: $0 (but might be slow/inconvenient)
2. Walk to the store, take a cab home with groceries. Total cost: $7
3. Walk to the nearest available Zipcar, rent for 1.5 hours, drop off groceries at home, drop off Zipcar, walk home from Zipcar. Total cost $20 (may be more depending on type of car. Also, on weekends, the nearest available Zipcar can be some distance away)

So, even for grocery shopping where a car is very helpful, Zipcar is a poor choice.

I don't think that the right business model for car sharing has been found yet. Zipcar's clearly isn't working.

by Phil on Oct 6, 2011 1:17 pm  

There are times when a regulated monopoly is a good thing; there are times when the "free market" is useful. The important thing is to be clear-eyed about the appropriate time for one or the other. This quasi-religious fetish for the free market is a bit silly.

The reason we have the worst service internet of any developed country is a perfect example of blind ideology triumphing over pragmatism. One could make a very strong argument that the US' embarrassing health care system is another.

by oboe on Oct 6, 2011 2:19 pm  

Eastern Market vendors fear rent increases: Tommy Wells wants to transfer Eastern Market to a quasi-public trust whose board would include appointees from the mayor, council, and vendors. Some long-time vendors fear being priced out.

I'd be in favor of some sort of rent control for vendors...on one condition: every 3 years, we have a public vote. Whichever vendor gets the lowest vote total is booted out of the market.

There are some halfway decent options, but the quality of a couple of vendors is criminal, especially when you look at various historic markets in Philly or elsewhere.

This sounds like a great first step in turning Eastern Market into a first-class market, rather than a lifetime sinecure for mediocre businesses.

I used to shop at a Vietnamese market in Chicago, and if the store manager dared to sell substandard fare, they'd be assaulted by an army of old ladies. Hell, I got an earful because I was about to *buy* some dodgy shrimp.

Obviously the Market's not going to go out of business; we need some mechanism for bringing market forces to bear.

(PS: Lance, if you want to rail about state-endorsed monopolies and tout the free-market cure-all, this is your moment to shine.)

by oboe on Oct 6, 2011 2:29 pm  

re: Walk To School Day:

http://www.flickr.com/photos/ddotphotos/6214214233/in/set-72157627824838038/

Oy, lookit these little liberals, what with their arrogance and sense of entitlement! Does that child's placard actually say, "Slow down!" They must think the world owes them a living! Can't argue with 5000 pounds of metal, &tc, &tc...

by oboe on Oct 6, 2011 2:42 pm  

@oboe: it is the bigshots using the tikes walking to school as a photo-op that raises my hackles. Any one of them actually escorting their kid?

by goldfish on Oct 6, 2011 2:59 pm  

Honestly, I think that Zipcar might be better off if either a majority of their cars were *not* reservable more than an hour or so in advance, or if there was some sort of accommodation for one-way rentals (via a reservation system).

Right now, yeah. It's too expensive. (But still cheaper than owning a car, says the guy who just shelled out $600 for new tires for his already-dying car.)

by andrew on Oct 6, 2011 3:19 pm