Avis Budget drives £300m US car club deal for Zipcar CAR HIRE giant Avis Budget is breaking into the car-sharing market by paying about $500 million (£306.8m) in cash for a US car club that has operations in several English cities. Zipcar, founded in Massachusetts in 2000, was inspired by European car clubs that allow their members to hire cars by the hour or day as an alternative to ownership or long-term rental. It claims to be the world's largest car-sharing service, with more than 760,000 members and 10,000 vehicles across Austria, Canada, Spain and the US. The company, which floated on Nasdaq in 2011, also operates in Bristol, Cambridge and London, where it runs more than 1,500 cars. In 2010, it acquired Streetcar, then the UK's largest car club, for an estimated $50m. Rising petrol prices have driven demand for car sharing in the US and Enterprise Holdings, the country's largest hire car firm, is expanding aggressively in the market. New Jersey-based Avis Budget is to pay $12.25 a share for Zipcar, a 49 per cent premium to its closing price on 31 December. Chairman and chief executive Ronald Nelson said: "We see car sharing as highly complementary to traditional car rental, with rapid growth potential." Nelson said the deal, which is expected to complete by the spring, should lead to annual cost savings of between $50m and $70m as Zipcar will be able to benefit from the combined group's buying power and shared maintenance operations, while Avis Budget will also provide some its fleet to cope with increased demand at weekends. Scott Griffith, chairman and chief executive of Zipcar, will remain with the firm. Avis Budget also said yesterday that it expects to deliver a full-year underlying profit of up to $840m, which would represent an increase of about 38 per cent on the previous year, on revenues 24 per cent higher at $7.3 billion.