Zipcar Business Model
1. How is Zipcar’s business model different from its competitors?
First, Zipcar has a very user friendly website and app that allows customers the ability to find a car within a short distance, choose which model of car he wants, and reserve the car. When a car is rented through Zipcar, the insurance and gas cost are already included in the rental price. Other car rental companies have centrally located branches that may be far away from the customer and/or difficult to travel to. This is a very important difference since most customers are renting a car because they do not have access to a car. This makes traveling to a rental branch very difficult for a large percentage of the exact demographic targeted by rental companies. When a customer arrives at a rental branch, he may not be able to select which model he wants. He must also pay an additional fee for insurance and gas.
The biggest resource at Zipcar is its IT platform. Not only does this include a user friendly interface with the customer, it also allows the company to collect and analyze data. From these metrics, the company can see where all of its cars are located, which areas are more popular rental sites, the physical condition of the cars, how many miles the cars have driven, and which demographic is renting the cars. It can then alter how many cars are located in specific areas and whom to market these cars to.
The customers of Zipcar find value in the ability to rent a car for short periods of time instead of for an entire day. This would make many customers more likely to utilize this service. For example, if I did not own a car and wanted to go to Costco, I could rent a Zipcar for an hour. I would be much less likely to rent a car for an entire day for a simple errand like this. Zipcar also charges customers an annual subscription fee, so even when a customer is not utilizing the service, he is still adding profit to the company.
2. Discuss the synergy between the business
First, Zipcar has a very user friendly website and app that allows customers the ability to find a car within a short distance, choose which model of car he wants, and reserve the car. When a car is rented through Zipcar, the insurance and gas cost are already included in the rental price. Other car rental companies have centrally located branches that may be far away from the customer and/or difficult to travel to. This is a very important difference since most customers are renting a car because they do not have access to a car. This makes traveling to a rental branch very difficult for a large percentage of the exact demographic targeted by rental companies. When a customer arrives at a rental branch, he may not be able to select which model he wants. He must also pay an additional fee for insurance and gas.
The biggest resource at Zipcar is its IT platform. Not only does this include a user friendly interface with the customer, it also allows the company to collect and analyze data. From these metrics, the company can see where all of its cars are located, which areas are more popular rental sites, the physical condition of the cars, how many miles the cars have driven, and which demographic is renting the cars. It can then alter how many cars are located in specific areas and whom to market these cars to.
The customers of Zipcar find value in the ability to rent a car for short periods of time instead of for an entire day. This would make many customers more likely to utilize this service. For example, if I did not own a car and wanted to go to Costco, I could rent a Zipcar for an hour. I would be much less likely to rent a car for an entire day for a simple errand like this. Zipcar also charges customers an annual subscription fee, so even when a customer is not utilizing the service, he is still adding profit to the company.
2. Discuss the synergy between the business