In a driverless world, what’s the difference between Zipcar and Uber?

Leslie Becker/Globe Staff; AP

If the future looks as some urban planners and business interests predict, city dwellers increasingly will abandon their cars and instead use a network of shared driverless vehicles to pick them up, drop them off, and head out to get the next passengers.

It’s a big “if,” but companies from different corners of the transportation sector — including ride-hail services, rental firms, and even traditional auto manufacturers — are betting on it. These companies already compete with one another, offering different ways for their customers to get from A to B. But if driverless technology fundamentally changes the way people use the roads, it could also erase the boundaries that have long kept these businesses separate.

Take, for instance, Boston-based hourly car rental service Zipcar and the ride-hail firm Uber. Both consider self-driving technology a key part of their future, which could put their business models on a collision course. After all, once you eliminate the driver, what’s the difference between renting a car and hailing a ride?


“Everybody’s entering the market for driverless mobility as a service,” said Egil Juliussen, an auto expert with the research firm IHS Markit. “Once the car drives itself, it becomes the same thing. The business model for ride-hailing and car-sharing essentially merge.”

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That means passenger-transportation companies will have to work hard to differentiate themselves from each other, or develop partnerships that emphasize the rivals’ strengths. Uber and Zipcar already are doing the latter. The companies this year reached a deal that allows Uber drivers who do not own personal vehicles to earn money using Zipcar rentals. (Los Angeles-based HyreCar, which recently launched in Boston, even allows car owners to rent their personal vehicles directly to ride-hail drivers.)

Zipcar president Tracey Zhen said the company has expertise in managing and owning fleets of vehicles. That could make it — and other rental companies — a strong partner for ride-hail services that have typically not owned their own vehicles, he said.

“Companies that do life-cycle management well and fleet management well will be the winners,” Zhen said.

While the widespread deployment of driverless vehicles is likely more than a decade away, companies today are exploring such partnerships. Zipcar’s parent company, rental giant Avis Budget Group, earlier this year agreed to service vehicles for Waymo, the self-driving car company that was spun out of Google.


And Uber’s chief rival, Lyft, has stressed the partnership approach, striking deals to test driverless vehicles with Waymo, auto manufacturers, and autonomous-car startups.

In Boston’s Seaport district, Lyft last week began offering rides in driverless cars provided by the Boston startup nuTonomy Inc.

This isn’t to say that passenger transportation companies have decided they need to form a mutual admiration society. They’re all working on ways to go it alone in the age of driverless. While exploring partnership is a way for them to hedge their bets, the individual efforts also are a predictor of how fierce future competition for customers might become.

NuTonomy, for example, is developing its own app for hailing rides, separate from Lyft or other partners. Uber seems interested in directly owning a fleet of driverless vehicles, recently unveiling a plan to buy thousands of vehicles from Volvo. Other car makers also are on alert. General Motors has lobbied for laws across the country to prevent companies that are not traditional auto manufacturers from operating driverless ride-hail systems.

And even as it contemplates driverless deals with other companies, Zipcar plans to offer driverless rides directly to its users in the future.


“Our main focus is still the Zipcar member and the consumer-use case,” Zhen said.

Wiqan Ang

Andrew Salzberg, head of transportation policy at Uber, said he expects there will be room for plenty of competitors, and plenty of business models, as driverless vehicles exit the realm of science fiction and get on the road. He suggested users who want a ride in a specific type of vehicle may opt for a rental company like Zipcar, while others who simply want to get across town could opt for a more traditional ride-hail or taxi service.

“There’s a lot of open space for different models to emerge,” he said. “Overwhelmingly, people just drive their own cars. ... The more that people are willing to not own a car there will be a proliferation of business models.”

Industry analysts agree. Laura Koetzle, an analyst with Forrester Research, said driverless car services could differentiate themselves not just through the types of vehicles they offer, but in the way passengers pay for rides. While companies like Zipcar operate on a subscription system, and Uber asks passengers to pay by ride, other services may use advertising as a way to offer discounts.

“You can imagine 20 years from now a wraparound video with 10 minutes of promotional stuff, inside the vehicle, to make the ride free or cheap,” she said.

While many of these visions of the future are predicated on fewer people owning vehicles, some consumers will probably buy their own own autonomous cars. Companies like Getaround, a Zipcar competitor that allows owners to rent out their vehicles when they’re not using them, expect individual driverless car owners to try to earn some extra income through these kinds of platforms.

Other companies likely will seek to deploy driverless technology as something more like a transit service, such as driverless shuttle buses. Boston-based Optimus Ride, which recently announced plans to cart passengers around the Union Point development in South Weymouth, is being paid by the developer — not passengers.

But the most common vision of the driverless future is the ride-hail model, to which established companies and startups alike are both flocking.

“The reason we have all these different flavors of mobility is because [of] the limitations of the technology available, or the limitations of public policy,” Koetzle said. “The way those companies provide mobility services can change...The technology is a great equalizer, so what will matter is what type and quality of service can you offer, at what price.”

Jessica Rinaldi/Globe Staff

Adam Vaccaro can be reached at Follow him on Twitter at @adamtvaccaro.