Zipcar: Revolutionizing Car Rentals
Case Code: BSTR360
Case Length: 16 Pages
Pub Date: 2010
Teaching Note: Not Available
Organization: Zipcar Inc.
Industry: Car Rentals, Car Sharing
Themes: Services Marketing, Business Models, Promotional Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts
"Now more than ever, in an economic recession and with gas prices on the rise, people and businesses are turning to car sharing. In addition, in an era where people buy music by the song, driving a car by the hour makes a lot of sense."
- Mark Norman, COO of Zipcar Inc., in June 2009.
"Zipcar is an emerging business model in a market which is yet to be totally defined."
- Neil Abrams, an Auto-Rental Consultant, in November 2007.
In June 2009, US-based Zipcar Inc. (Zipcar), the world's largest car sharing service, announced its plans for an IPO in 2010. Paul Bard, an analyst at investment advisory firm Renaissance Capital, said, "It sounds like a candidate for an IPO as the market recovers. People are always looking for fresh ideas."
Zipcar was started in 2000 in Boston, Massachusetts, by two enterprising women. After joining the Zipcar service by paying a one-time membership fees and an annual fee, customers could rent cars by the hour, under different driving plans. Cost of gas and insurance, and parking fees, were included in the car rental charges. Customers made their reservations online, and Zipcar used wireless technology to manage its fleet.
By 2003, Zipcar had about 6.000 members, and the service was available in Washington D.C and New York, in addition to Boston. However, mounting losses led to a change of management, with Scott Griffith (Griffith) becoming the CEO of the company.
He brought in changes to the operating, marketing and business practices at Zipcar, and targeted the student and business community, modifying the service to better suit their needs. These changes led to a substantial increase in membership, and the company expanded into other cities. In 2007, after a merger with Flexcar4, a rival car sharing company and its largest competitor, Zipcar received a boost in membership, and was able to enter five more cities...
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