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Zipcar, the Cambridge, Massachusetts-based company that joined the market segment in 2000, says it now has about 731,000 members and more than 11,000 vehicles worldwide. More than half of Zipcar’s customers are under 35, said Mark Norman, the company’s president and chief operating officer.

“Whether it’s movies by the month, music by the song or formal wear by the occasion, all of those are a smarter way to think about consumption, and Zipcar fits into that really well,” he said. Zipcar’s shares have dropped 43% this year under the threat of the new competition.

New Cars

While sales of new cars are rebounding, 18-to-34-year-olds accounted for 11.8% of vehicle registrations for new cars in the five months through May, compared with 16.5% in May 2007, according to data from R.L. Polk & Co., an auto- industry research company based in Southfield, Michigan.

Jared Fruchtman, 25, said using Zipcar gives him about US$600 more a month to spend on dinners out, cab rides and trips on the weekends.

“It wasn’t financially worthwhile to buy or lease a car right now,” said Fruchtman, who is studying to be a certified public accountant and lives with his girlfriend in a rented apartment in San Francisco.

“I never considered buying,” he said. “It didn’t make sense to tie ourselves down right now.”

High Fashion

That attitude extends to clothes. Rent the Runway, a website that offers high-fashion gowns and other couture for around 10% of the purchase price, is also targeting younger consumers. President Jennifer Fleiss, 28, said its business model is “almost recession proof.” Since its start in 2009, the company has grown to about 3 million online members and is adding approximately 100,000 per month. In May 2011, the New York-based company raised US$15 million in venture capital from outside investors, said Fleiss. Rent the Runway members typically range from 15 to 35 years old, she said.