caCOUNTRY: United States | MAIN TREND:Always Available | WEBSITE: www.zipcar.com
CUSTOMER EXPERIENCE: Find a car to rent near me for a fee less than that of taxi fare.
Zipcaris the world’s largest membership-based car sharing service, billable by the hour or day. Cars are conveniently located in urban parking garages near homes and offices. It requires no paperwork in reserving cars and provides gas and insurance for free. Zipcar makes it easy for city dwellers and non-car owners to be mobile, giving them access to a car that is around the corner and available 24/7 – connecting them to their desired destination efficiently and cost effectively. Members can choose the time slot, the car model, and the location to pick up the car. Reservations are made online or over the phone, 24/7. Its self-service system allows members to go to a Zipcar located within a 5-to-10 minute walk and use a keyless entry card to unlock and drive away. All Zipcars are equipped with a “black box” containing wireless and hardware technologies to access, communicate with, track, and manage the Zipcars.
WHAT WAS THERE BEFORE? The traditional car rental process is an expensive hassle – drivers must spend time filling out forms and pay for their own gas and insurance. Car rental companies are located in airports to target travelers and in busy city areas; these tend to be difficult to reach for city dwellers running short errands.
WHO NEEDS IT? City Dwellers: for non-car owners who need a car at times and want to save money. Businesses: As an employee benefit, for travel, and for green efforts. Universities: for green initiatives and solving campus congestion. Government: agencies who want to leverage the same technology of Zipcar’s consumer fleet.
IMPACT: As of 2015, Zipcar has over 900,000 members and over 9,000 vehicles in urban areas and nearly 260 college campuses throughout the US, Canada, and the UK. It offers more than 30 makes and models of self-service vehicles. And it also launched reservation through Facebook and mobile apps. Zipcar is also positively impacting the quality of urban life and environment with an estimated CO2 reduction between 550-800 million lbs in 2010. In 2012, Zipcar mark its first full year of profitability on a US GAAP basis. Zipcar was bought by auto-rental company Avis for about $500 million in 2013.
COMPANY “AHA”: We have recognized that there is a large unsatisfied market of city dwellers willing to pay to use cars for a couple of hours to do short errands, business travels, etc.
- Changing Lifestyle: The ability to be mobile at any time is increasing in importance. Zipcar provides city dwellers with 24/7 access to cars to meet their last minute travel needs.
- Sustainability: Efforts to help sustain our environment are rising. Zipcar has a mission to reduce CO2 emissions – 18% of its members have sold their cars since joining; fewer members are driving five or more times in a month; and members are using public transit, bikes, and foot-power more often.
- Customization: People value having things personalized to their unique needs. Zipcar members can choose the make, model type and even the color of their car, the time slot they need the car, and the location where they need to pick it up.
- Convenience: Millennials (18-30 years old) are choosing to drive less but still need access to cars at times. Zipcar gives them access to cars by simplifying the rental process and not worry about gas, insurance, and filling out forms.
- Pay-Per-Use: Offers different types of plans – from pay-as-you-go to a monthly commitment; driving rates vary according to the chosen plan, and all plans include gas, insurance, up to 180 miles daily, maintenance and roadside assistance. An annual membership is charged separately.
- Rewards of Scale: With its costs fixed in its fleet of cars, Zip car’s profit increases as more members join and use the cars.
Zipcar created barriers to entry by locking in valuable parking spaces for cars, building relationships with partners, developing talent and technology, and building brand equity – making it difficult for competitors to enter. Zipcar also formed multiple partnership with universities, organizations, and city governments, as well as with other car sharing (e.g. Avancar) and car pooling services (e.g. Zimride) are helping Zipcar scale up its car sharing service.