Zipcar case study

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Zipcar case study

  1. 1. Zipcar : Refining the Business Model<br />By<br />Group 4<br />
  2. 2. Concept<br />Car sharing business initiated in Switzerland in 1987.<br />Organized car sharing was the coordinated use of vehicles by various subscribers in succession and Independently of one another.<br />Member can reserve any car in the network<br />
  3. 3. Concept Best Suited<br />Urban Locations<br />Large number of potential user<br />Expensive Parking<br />Need to drive limited distance<br />College-educated individual were the most receptive to the proposition<br />
  4. 4. Benefits<br />Convenient<br />Easy to use<br />Freedom to travel<br />Hassle free ownership<br />Cost saving<br />Environmentally friendly – one car eliminates the need of 7.5 individual owned cars<br />
  5. 5. Course of Action<br />Company Web Site<br />Telephone Support<br />Technology development - challenge- admit only confirmed driver, capture usage data<br />Price Structure – security fees, initiation fees, annual fees, monthly fees, per mile fees, per mile fee and hourly rates<br />
  6. 6. 1st Business Plan<br />$25 - nonrefundable application fee<br />$300 - fully refundable security deposit<br />$300 - annual subscription fee<br />Additional member - $1.5 per hour, $.40 per mile<br />$20 fine for late return<br />Assumed annual renewal rate for members – 95%<br />40% utilization of vehicles. Where as European Companies – 50% utilization of vehicles<br /> Assumed – avg. member would take 4 trips per month at an avg. of 4 hours and 22 miles per trip<br />
  7. 7. Users were expected to<br />Handle simple maintenance themselves<br />Refuel and submit receipt for reimbursement<br />Keep the car clean<br />Take responsibility of any traffic or parking tickets incurred<br />Return to its original location before the reservation time expired<br />
  8. 8. Planned Launch<br />Boston<br />Insufficient and expensive off-street parking<br />Large number of college-educated and web connected individual<br />
  9. 9. Competitors<br />CommunAuto – Canada<br /> - Quebec City – 1994<br /> - Montreal - 1995<br />Portland based Car sharing – 1998<br />Seattle based Flexcar – 2000<br />Potential Competitors<br /> Traditional car rental agencies – Hertz and Avis<br />Car manufacturers<br />
  10. 10. How does Zipcar work?<br />Web or<br />Automated Phone<br />Wireless in-car<br />technology<br />
  11. 11. Reserve a specific car in a few seconds on the web…..<br />
  12. 12. Convenience and Security<br />Access to a Vehicle Only With An Active Reservation<br />
  13. 13. Financing the venture<br /><ul><li>Building the technology platform
  14. 14. Continuing the search for funding
  15. 15. Naming the business</li></li></ul><li>Starting zipcar<br />Marketing<br />Continuing the search for financing and building the management team<br />
  16. 16. Progress<br />Growth prospects and the continued search for funding<br />Exhibit 1 ( Economics of individual Car ownership)<br />Exhibit 2 ( Population of top 20 U.S markets)<br />
  17. 17. Car Sharing on Rise<br />
  18. 18. Conclusion <br />
  19. 19. Thank you<br />

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