Zipcar Case Assignment Questions

Assignment Questions: (1) How do you characterize the service Zipcar provides? Zipcar is the world’s largest American membership-based car sharing and car club service offering company providing car reservations to its members, billable by the hour or day. It is an alternative to traditional car rental and car ownership. The company shares Zipcars in different States of USA, Canada and UK. The company also has presence on over 230+ college campuses at universities across North America. Members can reserve Zipcars online or by phone, 24 hours a day, seven days a week.

Reservations can be made minutes or up to a year in advance. Zipcar members have automated access to Zipcars using an access card called a “Zipcard,” which works with the car’s technology to unlock the door, where the keys are already located inside. The cars are dropped off at the pickup location after use. With which companies or services does it compete? Zipcar’s main competitor and rival was a Seattle-based company Flexcar. In the fall 2007 Zipcar purchased Flexcar. In April 2010, Zipcar also bought London-based car-sharing firm Streetcar in its latest bid to expand across Europe.

Rental companies like Hertz, Enterprise Rent-A-Car and U-Haul are beginning to form competitive hourly rental programs, that car compete with Zipcar. I also found a competing company in NYC and Boston called Mint Car. Their web-site looks very similar to Zipcar and the service they provide is the same. What role does it play on its competitive landscape? In an interview of January 13, 2008 Zipcar chief executive Scott Griffith while speaking with Globe reporter Nicole C. Wong mentioned: “With our success, we’re going to see more entrants into the category.

The one thing that really is a benefit from the merger of Flexcar and Zipcar is we’re now at a company size of $100 million, which allows us to continue to invest in technology and brand marketing that I think will put us at the top of the competitive landscape for the long range. ” (2) What would you say are the critical success factors for Zipcar? Zipcar had positioned its service as a low-cost alternative to car rental and ownership. Recently, it had expanded its vehicle fleet to include luxury cars and SUVs. The prices on an hourly-basis are quite low and attractive for customers.

Every reservation includes 125 free miles – very comfortable for short-distance drives. Members could either call or go online to reserve a car. Reservations could be made as much as a year in advance or minutes before a car was needed. Insurance is included in the usage fees for Zipcars. Members who wash their cars are reimbursed up to $15 and given a free hour of use. Annual membership fees range from $50-$250 depending on the plan type. To sum up all these points, the critical success factors for Zipcar are: • Easy reservation system; • Low hourly-based prices; • Luxury and SUV cars possibility; 125 free miles/reservation; • Insurance; • Value added (15$ reimbursement for washing members); • Cheap and comfortable membership plans (Gas, parking, insurance, and maintenance included in all reservations); • No restrictions for ages 21-25. (3) What mechanisms does Zipcar have in place to manage behavior? What, specifically, are these mechanisms intended to accomplish? What adjustments, if any, would you recommend that the company make to these mechanisms? Firstly, Zipcar let the customers learn the characteristics of the service it offers. In the case study we see that time management means a lot for Zipcar.

Also, with ZipCards and offered services Zipcar let the customers be involved in the service that raised the loyalty to the company. One of the biggest goals of service business is customer satisfaction – so does Zipcar think too and offers its customers simple, comfortable and differentiated types of services. In the case study we see that though the customers feel loyal to the company, some issues still exist regarding the time management. Zipcar should be prepared for alike situations and offer the customers alternative solutions, so that the service chain holds still and has no gaps.