Toyota Prius Zipcar

Car sharing is catching on so much that rental car giant Avis has purchased the best-known brand in that industry, Zipcar, for $500 million.

Zipcar has 760,000 members in 20 markets who borrow cars by the hour rather than renting by the day or week, or owning a car. The service is especially attractive to people who live in urban markets with access to mass transit who only occasionally need a car.

The company was founded in 2000, went public in 2011 and is expected to post its first annual profit of $4 million when it closes the books for 2012. Its third-quarter revenue was $78 million.

Avis says it can save between $50 million and $70 million through the acquisition – for which it will pay $12.25 for Zipcar shares, 49 percent over the December 31, 2012 closing price of $8.24. Zipcar has struggled to prove to investors it could make it on its own, with Avis's buy price significantly lower than the company's $18 a share IPO price in April 2011.

Read more at AOL Autos »