Zipcar: Influencing Customer Behavior

Zipcar: Influencing Customer Behavior

Zipcar was established in Boston in 1999, and had expanded its operation to 21 cities as of 2004. The company provides car-sharing service as a low-cost alternative to traditional car rental, car ownership and other transportation leasing systems. Zipcar imposes an initial fee (to cover a driver’s license check), annual fee (for its members depending upon the plan type selected), and a fee per day/hour. Thus, there is no need for individuals to worry about insurance, parking, gas, down payment and routine maintenance. Therefore, customers gain the benefits of private cars without carrying high cost of ownership or renting through access to a fleet of vehicles on demand basis.

By the year 2005, Zipcar had the largest membership base, and the only main competitor in the car-sharing business was Seattle-based Flexcar. (fer) Besides the car-sharing service, Zipcar major competitors were rental agencies who provided similar services, and some others as taxi cabs and public transportation. So, buyer power is quite strong, since consumer may easily switch to another alternative. However, it is worth to mention that Zipcar had competitive advantage of providing flexible services and price policy to its members.

ZipCar had positioned its service as fast speed, convenient and low-cost option to ownership and car rental business.

Speed and convenience is Zipcar’s main focus. Whenever, the customer demands a car, they can go online or make a call to receive membership Zipcard first. Afterwards, members can make online reservation of a vehicle up to a year in advance or a few minutes prior to picking up the car. Zipcar is using advance technology, like Zipcard, which requires just swiping the entry card to unlock the car. Thus, members can pick up and return car on the designated location using Zipcard only. Besides, the use of ignition system with the sensor that unlocked the door prevents theft of Zipcars.

By the year 2004, Zipcar had locations in 8 states (Massachusetts, New York, New Jersey, North Carolina, Washington DC, Maryland, Virginia), where it had fleets offering a wide variety of cars. Moreover, Zipcar recently increased their vehicle fleet through including luxury cars and Sport Utility Vehicles (SUV). (ref)

Zipcar’s primary target market is urban dwelling people, so that most of the visited places, including work and running errands can be either within walking distance or within a reach of public transportation. Besides, Zipcar targets at groups of people who don’t want to own a car or need another car for different purpose. Since these individuals use car occasionally, sharing car instead of owning one is less expensive. In addition to cost saving, Zipcar takes care of car maintenance, insurance, gas and permanent parking location. Moreover, as opposed to car rental service, car-sharing doesn’t