About 400,000 Zipcar customers brought in $131 million in revenue to the 10-year old car-sharing company, but the problem is that Zipcar is a money-losing operation that could face growing competition in the future, according to DailyFinance.
DailyFinance columnist Kevin Kelleher notes that Zipcar has established a strong lead in a market some say it created, car sharing. Zipcar rents out popular models like Honda Civics and Toyota Priuses for between $5 and $10 an hour.
Zipcar has an accumulated deficit of $56 million, including a net loss of $34 million in the past three years. Most of the expenses went toward building fleets of shared cars, and for marketing in the 13 metropolitan areas in which the company operates.
The company's losses decreased in 2009. Last year's net loss totaled $4.6 million, compared to $14.4 million in 2007 and $14.5 million in 2008. But Zipcar posted a loss of $5.3 million in the first quarter of 2010, which the company said was driven by an increase in fleet and administrative expenses.
Operating cash flow in the most recent quarter was a negative $3.7 million, compared with a negative $2 million in the same quarter a year earlier and positive cash flow of $6.4 million for all of 2009.
Zipcar also faces long-term debt of $26.9 million, but has access to another $10 million from which it can borrow. The company paid $2.5 million in interest expenses last year.