Griffith hops in a Zipcar, not on the bandwagon

Scott Griffith came to Zipcar when it was a struggling startup, with all the excitement and anxiety that usually entails.

Engineers worked in the conference room because there wasn’t any other space, and new customers could stop by on Tuesday nights to eat pizza and learn how to use the new car-sharing service.

Zipcar has exploded in the eight years since then, with Griffith in the driver’s seat. The company expanded from a grassroots, “milk-crate-with-a-lamp-on-it” Cambridge office to a car-sharing behemoth that branched out to the U.K. and gobbled up its closest competitor. Its services are offered in more than 50 cities and 100 college campuses.

To use a Zipcar, most customers pay an annual membership fee. (It’s $60 in New York.) When they want to rent a car, they check online for cars parked in their neighborhood and reserve the one they want. They’re then able to unlock their car with a keycard. The keys stay inside, but the car won’t start unless the driver first scans the correct keycard.

Unlike a traditional rental-car company, gas is included. Members pay an additional hourly or daily fee only when they want to use a car. Rates start at $8.75 an hour in New York, or $82 a day. They’re cheaper elsewhere, starting at $7 an hour or $60 a day in Chapel Hill, N.C., for example.

In April, Griffith took the company public and he has plans for further overseas expansion. Shares priced at $18 when they debuted, then raced above $29 in their first week, but closed Wednesday at $18.78.

Although Zipcar has yet to turn an annual profit, Griffith says his biggest worry is not about the numbers but about keeping the entrepreneurial spirit alive in a company that’s swelled to 700 employees from about 15 when he first joined.

Griffith, 52, sees his company as changing the way people think about transportation, much as Amazon changed the way people think about shopping. Ultimately he wants to see more car sharers than car owners in every major city in the world.

An engineer by training, Griffith, talked to the Associated Press about preparing to go public, why Washington needs a new transportation game plan, and the near-insurrection when he first suggested that Zipcar should add BMWs to its fleet.

Q: What’s the biggest complaint you hear from members?

A: I wouldn’t say we get a lot of complaints ? we get a lot of new ideas. We heard years ago that people wanted to use our cars for do-it-yourself projects, so we added some small SUVs and pickup trucks. Lately we’ve had people asking about electric vehicles a lot. We’re testing a couple of plug-in hybrids (that can use electricity or gas). There’s a lot of anxiety with electric vehicles around, “What if I drive too far and the car won’t run?” So the early adopters seem to be more comfortable with the hybrids.

Q: How do you keep on top of what your members want?

A: One of the benefits of having a membership base is the dialogue we have with the Zipsters, as we call them. We’re seeking constant feedback so they tell us what they’re thinking and what they want.

In the early days, we used to invite members to come in to the office for orientation, 5 p.m. on Tuesdays. We’d usually have pizzas or burritos. We’d hear a lot about what kind of cars we should get, what was confusing. I miss those days. We had direct access right away to our members, and it was really cool to see the customer right before they got the car that first time.

Q: When you joined the company, Zipcar only offered one type of car, right?

A: Only green Volkswagen Beetles ? and my sense was you should be able to pick a car for the type of drive you want to take, so we started with some Mini Coopers. And think about being in Central Square in Cambridge, Mass.: This is sort of the heart of the overeducated and underpaid. And I said, “There are a lot of people in the areas we operate in who might want to drive a BMW,” and I thought there was going to be mutiny. Obviously we found out that BMWs became very popular and they’re a significant part of our fleet now.

Q. What issues in Washington are you watching?

We’re a new transportation option. We never want to get caught up in the web of regulations that were created before Zipcar came along. Things like taxes on rental cars, which might inhibit the growth of the company.

Q. What would you like to change about Washington’s ideas for transportation?

When Washington, D.C., does transportation planning, it’s very specific to automobiles. We’ve been trying to encourage Congress and the executive branch to think of things like car sharing. We should be planning much more public transit, much more commuter rail, and we still just think about highways and bridges.

Think about how public transit and car sharing can work together. People don’t necessarily need to own an automobile. If you’re a resident of the suburbs you could take commuter rail in and use a Zipcar during the day if you need to run an errand. It would make life in the suburbs more affordable and get rid of those cars that are sitting idle for hours and hours. The single-occupant vehicle driving around the city looking for parking spaces is just a broken model.

The problem with that idea is that in Washington, D.C., we have housing in one department, cars in one department, public transit in yet another department, railroads in another department. You really need that in one department to do it the right way.

Q: It’s been four months since Zipcar went public. What’s the main difference it has made in your job?

A: I think the big challenge was, “How do I add 25 percent to my day to focus on Wall Street and investors and public company things?” I didn’t exactly have 25 percent of my day free, but if you have a strong team you can offload some of the things that you used to do. But for the first few months that can be a bitter and unnatural act.

Q: What was the most important thing you told your workers as the company prepared to go public?

A: The biggest message is that this is the beginning of something new, not the end of something we used to do. We distributed options in the company, so they’re excited by the opportunity to grow shareholder value and they’ve got some skin in the game. The stock market is causing some anxiety and we’re getting questions about that. We tell them we need to focus on the long term and the rest will work itself out.

Q. So how do you feel about the stock price?

The performance of the stock has been in lockstep with what we had hoped for. It’s not a friendly time to be a public company. But we’re a company that went public for all the right reasons. It wasn’t an exit for investors, it’s to supply long-term capital for a market that we thought was exciting. When you’re going public for all the right reasons, you don’t really have time to time the market. Good companies should be able to go public at any time.