The Office of Fair Trading (OFT) has referred the acquisition of Streetcar Limited by the American company Zipcar to the Competition Commission.
The acquisition was completed in April 2010 and brought together Streetcar, the largest car share company in London, with Zipcar, the second largest, in a deal worth around $50m (£32m).
The Competition Commission has been asked to decide whether the acquisition has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the UK.
Members of car share clubs pay an annual membership fee and are able to hire cars by the hour picking up the vehicle from convenient residential locations, exploiting the flexibility offered by smart card technology and online and mobile booking tools.
The original objective of car share clubs was to reduce individual car dependence and, in so doing, help to minimise traffic, parking problems, and pollution.
Zipcar has been criticised in some quarters in the US, however, for being a for-profit venture and pursuing an aggressive acquisition strategy.
In a statement, Zipcar chief executive Scott Griffith said: “Naturally, we’re disappointed by the decision [to refer the acquisition to the Competition Commission] … which imposes a delay on a transaction from which consumers and the environment stand to benefit enormously … we are confident that once a more detailed review is undertaken, the Commission will conclude that the acquisition does not give rise to a substantial lessening of competition.”
The Competition Commission is expected to report by 24 January 2011. It has asked for all interested parties to submit evidence for or against the merger, in writing, by 31 August 2010. You can do this by either mailing Zipcar.Streetcar@cc.gsi.gov.uk or writing to the Competition Commission at the following address:
Zipcar / Streetcar inquiry
- Investigation into Zipcar takeover (Independent)
- Zipcar acquisition to be reviewed by UK regulators (Boston Globe)
- Consumer law news (The Solicitor)
- Consumer law (Findlaw.co.uk)
- Find a solicitor (Contact Law)
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