Zipcar retains the right to deactivate a member’s account and/or require alternative payment in connection with redemption of a lost or stolen gift card. Zipcar reserves the right to deactivate or reject any gift card issued or procured, directly or indirectly, in connection with fraudulent actions, unless otherwise prohibited by law. Zipcar is the world’s leading car sharing alternative to car rental & ownership. Book cars on demand by the hour or day. Join instantly, drive in minutes. Zipcar is a membership-based car-sharing company that provides automobile rentals to its members, billable on an hourly or daily basis. Members are able to view vehicle availability and reserve a self-service car via the internet, iPhone app, or telephone, in increments as short as.
Zipcar is a subsidiary of Avis Budget Group which acquired it in 2013. Originally Zipcar was founded by Antje Danielson and Robin Chase in 2000. Zipcar’s famous tagline: “Wheels when you want them” comes from the early days and is contributed to Robin Chase. Today’s slogan has slightly changed to “Own the trip, not the car” but still points to the service Zipcar offers: the convenience of a car to easily get to where you want to be without having to worry about the responsibilities and hassles of car ownership such as maintenance and repairs.
Today over a million people across 500+ cities and towns globally have access to over 12,000 Zipcars. Like most station-based carsharing organizations, Zipcar offers a large variety of different vehicle makes and models, including: hybrids, SUVs, pickup trucks, luxury vehicles, minivans, and cargo vans. To be a member of Zipcar’s program there is a membership fee and usage fee for when you rent the vehicle. Originally, membership costs was setup as an annual fee ($300) but the original founder adjusted to $70/year or $7/month to make it affordable to most members. If members book a vehicle, they are charged on an hourly ($7.50) or daily ($69) basis, a cost effective alternative to car ownership. Typical to the carsharing industry these rates include gas, insurance, maintenance and dedicated parking spots where the cars “live”.
Part of Zipcar’s popularity stems from its strategy to target students and build strong connections with colleges and campuses worldwide.To date, Zipcar can be found at over 600 campuses and colleges. Zipcar successfully targets students because it provides significant discounts rates for them. This widely successful program was introduced under Scott Griffith who took the helm of Zipcar in 2003.
While the two original founders realized very early on that technology was needed to run a carsharing business successfully, Griffith also helped lead the development of Zipcar’s technology into the FastFleet system. This was a crucial component to Zipcar’s success in providing a convenient carsharing service. Before Avis acquired Zipcar, this was one of the revenue streams and Zipcar was one of the first carsharing organizations worldwide to release an iphone app (2009). FastFleet set a benchmark for all carsharing organizations and was one of the reasons why Avis was interested in buying Zipcar.
In recent years, Zipcar has expanded its business model from the traditional round trip station based carsharing and was offering one-way car sharing from A to B and free-floating in select cities. However, the A to B model seemed less successful and so earlier this year Zipcar closed its One>Way program in Seattle and only kept Boston open. Brussels, Zipcar’s free-floating city (which runs on Vulog’s technology not FastFleet) is still operational. Zipcar is also experimenting with commuter pricing plans where members get a Zipcar and a parking spot from Monday to Friday and only have to pay a monthly fee ($250/month plus $0.45/mile driven).
How Zipcar Was Born
Zipcar was the brainchild of Antje Danielson, a Harvard geochemist who studied the chemical composition of the atmosphere and became increasingly worried about the world her children would inherit. In an interview with The Verge, Danielson said, ” what I saw [in academia] was a lot of theory, but no application.” She wanted to change her focus from the Earth’s past to its present, and to start a company with an environmental focus. So when she met Robin Chase, an MIT Business school graduate, the two decided to give it a try and founded Zipcar. The two founders described themselves as conscious consumers which explains why the original marketing messages of Zipcar were heavily focused on the positive environmental impact carsharing has.
Chase and Danielson took inspiration from a study involving Switzerland’s Mobility Cooperative, the oldest car-sharing company in the world. Mobility was different from those already operating in the US because it had a lot more traction in the 90s with with 17,400 customers and over 700 vehicles. Mobility also focused on technology very early on, where its inhouse fleet management software allowed members to access cars without constant key-swapping.
While the first years of Zipcar were focused on growing the company and building technology, the early 2000s were full of changes. In 2001, Danielson was let go of Zipcar because of her lack of involvement and missing experience in running operations. Two years later, and after several rounds of investment funding that Chase couldn’t raise, Scott Griffith took over and Chase was also removed from the company. Griffith took a much more aggressive and systematic approach in growing the company and in 2007, Zipcar was finally able to merge with one of the largest US carsharing companies on the West Coast – Flexcar. Part of that deal was due to the brilliant negotiations of Steve Case, CEO of Revolution a venture firm with investments focused on the sharing economy. The merger with Flexcar was part of the reason why Zipcar was valued at $170mio for the 2011 IPO.
In 2013, Zipcar was acquired by Avis for just under $500 mio. Avis saw potential in applying Avis Budget’s experience and efficiencies of fleet management with Zipcar’s customer-friendly technology. In fact, since the acquisition Zipcar’s technology is proprietary and exclusive to Avis and its own brands.
Zipcar’s Strengths
Geographical reach
Zipcar has become the best known station-based carsharing service in North America. Its geographical footprint is large, predominantly in the US but it is also present in Canada, France, Spain, Belgium, the UK, Taiwan and Turkey. With over a million members it serves as many people as the largest free-floating competitors, car2go which is backed by Daimler (Daimler recently merged with BMW ReachNow). The size and geographical reach is beneficial for all Zipcar members because it allows members to travel easily from city to city under the same membership in other markets. It can be particularly beneficial when members travel to foreign countries because it provides members the comfort of a familiar brand and members know how to use the service.
Cost Savings for members
Carsharing is generally a much more cost-effective option for people than personal vehicle ownership. In 2017, AAA estimated that owning and operating a new vehicle costs approximately $706/month, Zipcar claims that their members spend on average just over 100$/month (including their monthly membership).
To help members save costs, Zipcar has recently introduced a new membership model: the commuter plan. Vehicle utilization for most station-based carsharing services is low during the week. So it made perfect sense for Zipcar to introduce the Commuter Plan: For $250/month, members can have access to an economy vehicle from Monday to Friday. The key selling factor is the parking spot that is included: in cities like Seattle or Boston a monthly parking stall is often between $250 – 500/month depending on location. With Zipcar Commute, members have a dedicated reserved stall downtown and close to their workplace. In fact, the new plan is even attractive to “untypical” carshare members: we interviewed super users (people that have more than one carsharing membership) in Seattle recently and one father of 2 who owns his own business and two cars has subscribed to Zipcar Commute because of the free parking stall.
Less Vehicle Ownership and VMTs in Cities
Most cities in North America have a transportation plan that focuses around sustainability and using environmentally friendly modes to reduce emissions. This means that many cities pay special attention to active transportation, such as biking and walking, and removal of vehicles in their cities. One of the biggest benefits of carsharing for cities is that it supports their transportation plans because carsharing impacts behaviour positively. These impacts have been researched extensively and Zipcar in particular has been the focus of many of these studies. The four main questions these studies try to answer are:
- How many personally owned vehicles are removed from the road for each carsharing vehicle?
- Do carsharing members travel less miles/km (VMT) than regular car owners?
- How do VMTs of carsharing members and the more gas efficient fleets impact green house gas emissions?
- How much space is saved in cities that can now be used for parks etc because there are less parked vehicles?
Zipcar has a popular graphic on their website that summarises the numbers the findings.
Studies that have answered these questions and focused on Zipcar can be found here:
Zipcar’s Revenue Model and Costs
The last publicly available financial report of Zipcar is from 2012, where Zipcar reported just over $275 million in revenue and a net profit for the first time in Zipcar’s history.
The main revenue sources were vehicle usage and fees from the US, Canada, Spain and Austria. Zipcar’s US locations accounted for the majority of all revenues. Vehicle usage – the booking of Zipcars charged on an hourly rate – accounted for 62% of the total revenue. Fees revenue includes annual and monthly membership fees, as well as application fees and damage waivers. Fees were 15.5% of the total revenue for 2012. The other 22.5% of revenue were either incurred through interest, the sale of Zero Emission Vehicle credits or through the software as a service licensing fees of Zipcar’s fleet management solution, FastFleet.
Costs
Carsharing is an asset intensive business and costs to manage fleet and members are often underestimated. To illustrate this, when Chase was still CEO she admitted that the real costs were much higher than she had modelled originally. This is a phenomena not uncommon. movmi sees this all the time in our work which is why we built a financial model that helps our clients cover all cost and assumptions.
In 2012, Zipcar’s fleet operations accounted for 63.6% of all operating costs. The rest was either due to marketing & sales and general administration (25.2%) or member services and fulfillment (7.3%). Marketing & Sales costs increased in 2012 mainly due an increase in workforce. At the end of 2012, Zipcar employed 553 full-time employees, including 169 in fleet operations and support, 118 in member services, 93 in sales and marketing, 52 in engineering and 121 in general and administrative functions. It is also interesting to know that the average cost per member to join the program was between $54 and $89. Vigor nintendo switch code. This number only includes marketing & sales activities, it does not include the application processing costs (a cost that is normally charged back to members as a one-time application fee). It is crucial to understand that a large amount of marketing & sales dollars have to be spent to grow the membership base and then ultimately utilisation of vehicles.
The last 3.9% were incurred by research and development and amortization. Zipcars gross margin was 5.1%, prior to being acquired by Avis in 2013.
Zipcar’s Operation
As you can see from the financials, margins are tight which means efficient operations are imperative for any carsharing organization. Another reason why smooth operations are important is because they have to be able to deliver a high quality member experience. Zipcar originally focused on making its operations scalable through substantial investment in refining, innovating and improving their operations and fleet management software, FastFleet. FastFleet was designed to deal with the daily tasks for fleet managers as well as the member service team. It integrated vehicle usage data and member feedback and generated daily task lists for cleaning and regular maintenance. The call center utilized the same system to troubleshoot any issues members may have during a rental. The system also provided reporting capability, enabling Zipcar’s General Managers to monitor and compare performance metrics across vehicle types, vendors and fleet teams.
Zipcar Atlanta
Another area, Zipcar invested early on was the analysis and understanding of usage trends. Zipcar quickly realized that the number and placement of vehicles in their fleet is based upon seasonal demands. Like most station-based carsharing services, demand is generally higher in spring and summer which is why Zipcar adds vehicles to the fleet during those months and decreases them during the winter. This is an area where rental car providers also have a lot of understanding so it made a lot of sense for Avis to combine forces with Zipcar.
Zipcar locations are managed by local General Managers and Fleet Teams. While the General Manager grows the market and is responsible for sales and business development, the Fleet Manager looks after planning and coordinating vehicle service as well as placement of vehicles. The General Manager deals with promotional teams that attend events or setup booths in the streets of a city. They also deal with the local authorities to obtain special parking permits (if possible) and manage the relationships with the universities and colleges. The Fleet Manager has a team of fleet associates but also engages and manages a network of third-party service providers (such as service shops, parking providers and mobile cleaning vendors).
Further Thoughts
While we are inspired by Zipcar’s overall success and progress over the past 18 years, there is one area where they have lost their pioneering status in recent years. Recently, movmi conducted a competitive benchmarking study and found that while Zipcar used to be at the forefront of using technology to manage members and fleet, their technology and innovation has stagnated since Avis acquired the company in 2013. It is sad to see that, in fact, Zipcar is now lagging behind when it comes to a seamless member experience that is enabled by technology. The table below summarizes movmi’s findings from the benchmarking study of the four largest services in Seattle:
How Zipcar Compared to the Competition:
- The registration process is slow and full of friction: our testers had to email paperwork and generally waited up to 2 weeks to be fully approved.
- The booking and unlocking of the vehicle was a mix between using the app and holding an RFID card against the windshield. It was confusing most of our testers because all other services allow for an app only experience.
- Last but not least, we found that wayfinding (the ability to find the parking stalls at the beginning or end of a trip) was done poorly. The location descriptions in the app were wrong and when our testers called customer service, the agents had wrong information in their system too.
The recent introduction of the Commuter Plan at least suggests that Zipcar is rethinking its business model and creating innovative and cost-effective solutions for their members again. Which hopefully means that Zipcar will also tackle some of the shortfalls of their member experience and invest in some technological upgrades soon.
You can find more about our benchmarking studies here.
Note: This article has not been endorsed or sponsored by Zipcar and there is no affiliation between movmi and Zipcar.
Zipcar Rental Cars
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Public Transportation and Ride Sharing: If you take public transportation, shared rides, van pools, buses, trains, ferries etc. it is recommended you wear a face covering throughout rides with others and avoid touching surfaces with your hands. Upon disembarking or leaving the vehicle wash your hands or use alcohol-based hand sanitizers with greater than 60% ethanol or 70% isopropanol as the preferred form of hand hygiene as soon as possible and before removing your mask.
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Zipcar is Here!
Zipcar Cancellation Policy
Don’t have a car on campus, but need a way to get around? Check out Zipcar for WSU students, faculty, and staff.
What is Zipcar?
- A great way to get around the WSU campus, the city of Pullman, and surrounding areas if you don’t have a personal vehicle on campus.
- Drive cars by the hour or day. Gas & insurance included.
- Choose from sedans, hybrids, and SUV’s.
- Apply online. Once approved, Zipcar will send you a Zipcard to access vehicles worldwide.
- Book a Zipcar for as little as 1 hour or as long as 7 days.
- Hold your Zipcard to the car’s windshield to unlock. Voila! It’s all yours.
- Hit the road. When you’re done, park the car in its reserved spot and use your Zipcard or the app to lock up.
Interested in utilizing Zipcar?
Zipcar Franchise
Join Now!Washington State University students, faculty, and staff can join zipcar for only $35/year.
Get 24/7 access to Zipcars parked right on campus! Simply reserve online, let yourself in with your Zipcard and drive. Zipcar’s low hourly and daily rates always include gas and insurance.
You only need to be 18+ to join. Members age 18-20 can use a dedicated group of Zipcars that live on campus. Members age 21+ also have access to thousands of Zipcars all around the world. Find cars on or around the WSU campus.
Students With Drive
Whether you play club sports, volunteer at the local hospital, or even mime, Zipcar wants to help you do what you do best with the Students With Drive grant program. Each month, Zipcar awards $27,000 in transportation grants to student organizations across the country so groups like yours can drive for free to volunteer opportunities, academic conferences, or wherever you need to go. Ready to enter? Follow these simple steps to enter your organization today:- Visit the ZipcarU page on Facebook
- Complete the Students with Drive application
- Each month, 15 finalists will be chosen to win grants
Once you’ve checked out Students With Drive, head over to Zipcar.com to become a member today!