Zipcar Inc., the short-term car-rental service based in Cambridge, Massachusetts, launched its IPO this morning. Bloomberg reports that the IPO raised over $174 million, selling 9.7 million shares priced at $18—well above an initial proposal that pegged the share prices at $14 to $16. (Update: Zipcar's share price surged 56 percent today, closing at $28). The most recent SEC filing can be viewed here.    

Analysts have high hopes for the deal. John Fitzgibbon, founder of IPOscoop.com, told the Associated Press that Zipcar is "one of the long-awaited hot tickets in the IPO valley." Scott Sweet of IPO Boutique told MarketWatch "Demand is massive, and that is often the case when you have cultlike IPO...Zipcar is a phenomenon that fits that bill."

Currently, Zipcar boasts more than half a million customers (or "Zipsters,") who have access to a fleet of more than 8,000 vehicles in 14 major metropolitan areas and more than 230 college campuses in the United States, Canada, and the United Kingdom. Zipcar's most recent launch, in Sacramento, California, took place on March 30. Zipcar rents cars on demand, at garage-or-on-street locations peppered throughout cities, by the hour or by the day. Members pay a $60 annual fee and $25 application fee to join the service, and use a keycard to access cars without ever speaking to another human. Zipcar's niche has focused serving people in urban markets who don't own cars but who have a need to use one from time to time.

Founded in 2000, the company ranked No. 919 on the 2010 Inc. 5000, and registered a three-year growth spurt of 328 percent. Inc. profiled Zipcar in 2008. Last year, the company's revenue exceeded $186 million, but the company has yet to turn a profit. In fact, Zipcar has incurred losses since it was founded in 2000, and in 2010, the company was more than $14 million in the red.

In one of its S-1 filings with the Security and Exchange Commission earlier this month, Zipcar noted "We have a history of losses, and we may be unable to achieve or sustain profitability...We do not know if our business operations will become profitable or if we will continue to incur net losses in 2011 and beyond."

Still, despite the fiduciary risks (which are outlined, in near-apocolyptic detail, on pages nine through 29 of the filing) buyers of Zipcar stock seem to believe that the company's business model will ultimately become a profitable enterprise. Some analysts have noted that rising gas prices have made car-sharing a desirable method of transportation in urban areas; other experts have praised the company for its successful overseas strategy and smart use of technology. With 406 employees and a high amount of visibility, Zipcar has become the most recognizable car-sharing service of the 21st century.

"We believe the global addressable market for car sharing is enormous and in the early stages of development," the company noted in its filing to the SEC. "Given our estimate that ten million driving age residents, business commuters and university community residents live or work within a short walk of a Zipcar, we believe the adoption in our current cities represents only a small fraction of the existing market opportunity. Additionally, there are many attractive international and domestic markets with little or no car sharing services today."

In fact, what little competition exists in other markets, Zipcar has been aggressive in acquiring. In 2007, the company bought Flexcar, its biggest competitor in the United States, and then in 2010, the company bought its U.K. rival, Streetcar Ltd. Rental giants like Enterprise and Hertz have trotted out their own car-sharing services, but apparently with only marginal success. Since launching in 2008, for example, "Connect by Hertz" is only avaliable in New York and New Jersey, as well as a handful of universities.

According to the Boston Business Journal, Steve Case's venture capital firm, Revolution Living, owns 21.5 percent of Zipcar (pre-IPO), while  Benchmark Capital Partners owns 9 percent, Greylock Partners owns 6.7 percent, and Smedvig Capital of Norway owns 5.2 percent.

Scott Griffith, Zipcar's CEO told GigaOm last year that Zipcar has redefined how urban dwellers think about car ownership. "Lots of people sell or don't buy cars as a result of our business," he said. "Or we become their second car—their fractional second car."

Some of the proceeds of the IPO will go to repay outstanding debt Zipcar owes to financial instutitutions, and "approximately $5.0 million to repay amounts owing to certain former shareholders of Streetcar" as well as a portion of the net proceeds to invest in "companies, technologies, services or assets that complement our business."

The filing comes amid a recent slew of high-profile IPOs. And it's evidence that public offerings are on the rebound. There were 157 IPOs in 2010, compared to 63 in 2009, and just 32 in 2008, when the market hit the floor. Other Inc. 500 companies have recently gone public or filed for IPOs, too. SkullCandy and Pandora filed in January and February, 2010, respectively.

Underwiting writing the deal are investment bank giants Goldman Sachs and J.P. Morgan. Zipcar plans to trade on the Nasdaq under the abbreviation "ZIP."