Zip Car Essay

2635 Words Mar 31st, 2008 11 Pages
Executive summary

Zipcar provides a car-sharing service that members pay annual fees and usage fees and they use Zipcar service independently. Recently, late returning of cars has been a major problem of Zipcar operation. Through situational analysis, it was identified that Zipcar must find a way in its operation to influence customer behaviour and the company should develop strategies which can encourage its customer’s on-time return behaviour.

Three major factors of the car-sharing service industry; customer convenience, vehicle availability, managing operation process were used as criteria to evaluate alternatives along with cost effectiveness and company’s long term sustainability. Although Zipcar has already adopted few
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(Appendix 2) According to the research, typical characteristics of the users for the service are middle-income range and between the ages of 21-55 while majority of users are in the 21-39 range. They live in households with no more than one car and exercise more than the general population; they walk, bike, or use transit system when they commute to work. Also, those users have relatively high level of education. (Appendix 3)

Zipcar has been also targeting young generation through partnership with universities. This partnership allows students to get cars at their convenience after school. Moreover, students can get favorable price from Zipcar as universities support Zipcar business for trade-off. Therefore, the partnership has encouraged younger people to use Zipcar services. Furthermore, Zipcar does not charge higher fees to members younger than 25, unlike other car rental companies. As Zipcar charges the same low rate to everyone, it attracts younger people as opposed to the rental companies that charges extra dollars to those between 21 and 25. Moreover, car-sharing network advocates sharing a car in cities. They often use quotes from William Clay Ford Jr. (CEO, Ford Motor Company Ltd.) “If you live in a city, you don't need to own a car.” The phrase helps Zipcar business as the company also targets people who live in major cities. Zipcar has

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