Zipcar : Refining the Business Model

By Group 4

Concept
Car sharing business initiated in Switzerland in 1987. Organized car sharing was the coordinated use of vehicles by various subscribers in succession and Independently of one another. Member can reserve any car in the network

Concept Best Suited

Urban Locations Large number of potential user Expensive Parking Need to drive limited distance College-educated individual were the most receptive to the proposition

Benefits
Convenient Easy to use Freedom to travel Hassle free ownership Cost saving Environmentally friendly one car eliminates the need of 7.5 individual owned cars

Course of Action
Company Web Site Telephone Support Technology development - challenge- admit only confirmed driver, capture usage data Price Structure security fees, initiation fees, annual fees, monthly fees, per mile fees, per mile fee and hourly rates

st 1

Business Plan

$25 - nonrefundable application fee $300 - fully refundable security deposit $300 - annual subscription fee Additional member - $1.5 per hour, $.40 per mile $20 fine for late return Assumed annual renewal rate for members 95% 40% utilization of vehicles. Where as European Companies 50% utilization of vehicles Assumed avg. member would take 4 trips per month at an avg. of 4 hours and 22 miles per trip

Users were expected to

Handle simple maintenance themselves Refuel and submit receipt for reimbursement Keep the car clean Take responsibility of any traffic or parking tickets incurred Return to its original location before the reservation time expired

Planned Launch
Boston Insufficient and expensive off-street parking Large number of college-educated and web connected individual

Competitors
CommunAuto Canada - Quebec City 1994 - Montreal - 1995 Portland based Car sharing 1998 Seattle based Flexcar 2000

Potential Competitors
Traditional car rental agencies Hertz and Avis Car manufacturers

How does Zipcar work?

Web or Automated Phone

Wireless in-car technology

Reserve a specific car in a few seconds on the web ..

Convenience and Security

Access to a Vehicle Only With An Active Reservation

Financing the venture

Building the technology platform Continuing the search for funding Naming the business

Starting zipcar
Marketing Continuing the search for financing and building the management team

Progress
Growth prospects and the continued search for funding Exhibit 1 ( Economics of individual Car ownership) Exhibit 2 ( Population of top 20 U.S markets)

Car Sharing on Rise

Conclusion

Thank you