“This merger will offer increased benefits to our customers and improve our ability to expand into new markets,” said Zipcar CEO Scott Griffith, who will lead the new company, which will keep the Zipcar name and Massachusetts base.

Zipcar and Flexcar don’t have much competition in the car-sharing business beyond smaller local firms, but they do compete with traditional rental-car companies.

Enterprise Rent-A-Car has been trying to match the car-sharing services’ conveniently located cars by adding small rental locations in neighborhoods, supplementing more traditional locations at airports, said David Cole, chairman of the Ann Arbor, Mich.-based Center for Automotive Research.

“It would not be a difficult thing for them to move into this business,” Cole said.

The merger means members of either company will be able to use both firms’ cars. Zipcar also plans to increase its insurance limits to $300,000 per accident, Griffith said.

The company is still finalizing its pricing scheme, but plans to go with Flexcar’s higher maximum 180 free miles per day, and will charge an hourly rate of around $10-$11 with some adjustment for different markets, said Mark Norman, former Flexcar CEO who will be president of the new company.

D.C. and San Francisco are the areas where there is the most overlap between the two companies, but the new company plans to keep most cars in place even where there are vehicles from both firms located, Griffith said.

“It’s an organic model that will continue to expand neighborhood by neighborhood, according to demand,” Griffith said.

The combined company will operate in eight major metropolitan markets, as well as a number of smaller towns, particularly those with a high university presence.

Neither company would disclose its annual revenue, but Griffith said that neither is profitable, and the combined company will continue to invest in growth rather than focus on making money.

The Associated Press contributed to this report.

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