Zipcars!

A cool economic and environmental innovation in a number of cities-- to rent cars by the hour...

Here's Katy Marquardt in U.S. News & World Report...

The story opens with Megan Graff's interest in Zipcars and her periodic use of a car named...

Armson belongs to a fleet of cars owned by Zipcar, a company that has turned the concept of car rental on its head. There's no waiting in line, and there's no spiel on upgrades or insurance. In fact, there's no face-to-face interaction at all. Customers apply to become members—or "zipsters"—and reserve vehicles online.

And forget about getting stuck with a Ford Taurus or Chevy Cobalt. Zipcars, which are scattered throughout city neighborhoods, are fun and whimsical (think Mini Coopers and Volkswagen Jettas with names like "Dagwood" and "Jinglebell"). Car doors unlock with the flash of a pass card over a sensor on the windshield, and a key hangs from the steering column. Gas and insurance are included in an hourly rate, which tends to range from $6 to $10.

Run out of a sunny, warehouse-style office in Cambridge, Mass., Zipcar aims to offer urban dwellers "the same freedom and feel of owning a car but without the baggage and without the hassle," says chief executive Scott Griffith, 48, a former Boeing executive...The company, founded in 1999 by an MIT business school graduate and a Harvard environmental science scholar, today claims 200,000 members in 50 cities and 5,000 vehicles (1,300 of which are in New York City). A huge boost—including five new cities—came late last year, when Zipcar merged with the industry's other major player, Flexcar....

About two thirds of Zipcar's members are under 35, an age that's been trending up over the past few years. Based on survey data, the company says that more than 40 percent of Zipcar users either sell their car or decide not to buy one. The target market is the 20 million people who currently live within a five- to 10-minute walk of a Zipcar, Griffith says, more than half of whom don't need to drive every day....

The company is making a big push to intercept customers early by revving up its presence on college campuses. So far, the service is available at 70 universities...

Traditional rental-car companies are beginning to eye Zipcar's market....