Zipcar Company

By Author: Henry Ford
Total Articles: 189
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Company Background
Zipcar is a self-service car sharing company that is based on membership. It provides its members with rental automobiles that are billed by the hour or by day. It was founded by Robin Chase and Antje Danielson in 1999 in Cambridge, Massachusetters. It is the largest car sharing company in the world with 6000 automobiles and 275,000 drivers in 49 cities in the United States (The Economist, 2009). It was founded with the aim of providing affordable car rental services to its members. It also operates in Toronto, London and Vancouver. It has 10,000 members.

Products and services.
It offers various services to its members whom are referred to as zipsters by the company. These services include self service, on demand cars for business or personal needs on day or hourly basis. It offers these services at a low rate and these rates are inclusive of gas, driver’s insurance, parking and maintenance. The members are able to view the available cars on the internet and hence are able to reserve a self-service vehicle through the same. (Zipcar, 2010). The Zipsters are given a Zip card which is an ...
... access card with a wireless chip and this card can only open the car that they have reserved. The zip cards are usually Radio Frequency Identification (RFID) enabled and they therefore provide innovative technology that enables the members to just unlock the door and drive. The members are also offered the chance of knowing an upcoming reservation through a text alert. The reservation and use of the Zipcar is enjoyed by the members in any Zipcar city.

Competition
The direct competitors of Zipcar are Cooperative Auto Network, PhillyCar Share and U Car Share. This is in regard to the fact that these companies compete with Zip car in its markets that include the residential areas, colleges and businesses (Goldman, 2008)

Substitute products.
Zipcar offers these customers the experience of driving their own cars unlike the taxi cabs. It also provides its services to businesses, universities and other organizations. These services enjoy a discount on the membership fee annually. These services which are known as Z2B also have discounts on Monday to Friday driving. Zipcar has partnered with various universities and colleges to provide these services to students near their campuses.

Zipcar’s competitive advantage
Its competitive advantage lies in its customer-centric vision, its innovative collaborations with other companies like Zimride. Its competive advantage also lies in its operational efficiency and its ability to maintain the customer base that it has acquired. It also lies in the user experience service where one drives him or herself. Its cars are also reserve parking slots in the densely populated cities where finding parking space is usually a problem.

External Environment
Internet- this has led to the building of a critical mass who share one origin, destination and time match. It has become possible to reserve a car online or through the phone. Use of innovative technology- this include use of Zipcards that allows the members to simply unlock and drive away, Zipcar mobile locator, a phone application that is used to view and reserve vehicles based on where the member is currently located Google maps which allows members to view the locations of available cars and they can then preserve the available cars within the map screen. The use of text message alerts also enables members to receive alerts of an upcoming or an existing reservation.

Target Market
Zipcar’s major target market is in residential, businesses and universities and colleges. It focuses its market on the densely populated residential areas where there are a lot of people without cars. It has become a symbol of urban transportation. It has changed personal and driving behavior patterns in that the members are taking advantage of all the ways and methods of transport available and they only use cars when they necessarily need to. This has led to less congestion on the roads, reduced green house gas effects and overall transport efficiency. Zipcar has reduced many costs for its members including the high parking fees, high maintenance and other miscellaneous costs.

Diffusion of Innovation: placement & justification
Zipcar has partnered with online carpooling service providers that will allow the carpoolers to share rides even when they do not own a car. The members are able to rent cars on hourly rate from locations that are closer to their homes. The partnership with Zimride allows members to post date, time and destination of rental car automatically onto the Zimride website. The aim of this innovation targets University students and it is aiming at going big fast. The rate of Zipcar diffusion is very high. It is a company that has filled the gap between taxi and rental cars.

Product Characteristics
The Zipcar members are able to reserve a car online regardless of their location. This has increased the efficiency of reserving a car. The cost of driving a personal vehicle is eliminated with Zipcar in that the car sharing is cheaper. This has led to Zipsters saving on money that would have been otherwise used for maintaining their personal cars, gas and insurance. The Zipsters mobile locater, Google maps and the text alerts are some of the features that appeal to the customers.

Pricing
The costs and rates are variable depending on the plan of the members. For new members and those planning to use Zipcar’s for a few times a month, an occasional driving plan is recommended. In this plan, there is no monthly commitment, you pay as you go and there is an annual fee. The plan for frequent drivers and those who use Zipcar as the primary means of transport includes a monthly commitment, discounted rates and with no annual fee. In this, there are four monthly commitments that include an option of $50, $75, $125 and $250. This is profitable. Zipcar can profit more by offering its services to more universities and colleges and also by operating in other cities. Zipcar is well established in the market and hence happens to be the market price determiner.

Distribution
Zipcars are located in New York City, Boston and Washington among many other cities. In Boston Zipcars are strategically located near subway stations hence the members can get access to them and reach their destinations that may not be reachable using public transport. The service is available online to members in Zipcity where by the members log in and reserves a car.

Promotion
Promotion is through attractive packages that are offered to frequent users of Zipcars. The more you use the Zipcars the lesser you pay. New Zipcar customers are university students, environment friendly groups and young professional groups.

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The author is senior writer at https://www.allacademicanswers.com