Group 8:
Alex Campbell, Walton Coleman
Henley Odom, Daniel Osorno
Service Management – eMBA 7260 – Nicpon
ZipCar: Influencing Customer Behavior- 08/11/14
1. How would you characterize the service Zipcar provides? With which companies or services does
it compete? What role does it play in its competitive landscape?
ZipCar’s is a membership service that consists on providing convenient and efficient (in the
sense of on demand only) transportation services. It allows customer who have little need for
a vehicle or have restrictions to own a vehicle (due to initial costs, total costs of ownership,
parking availability, etc) to have access to a vehicle near their homes that they can walk up to
and pickup, and return. ZipCar also provides the flexibility to rent based on smaller time
slots and not by the day. Lastly, ZipCar provides a flexibility benefit by allowing customers
to select their car based on the need that they are planning to have. This way, people can rent
a small vehicle for quick runs and a large vehicle for extended family or large pickups.
ZipCar competes against a variety of services both public and private. In the private sector, it
competes against companies that provide transportation services and against individuals who
chose a different method of transportation aside from a rented car. In the public sector, it
competes against mass transit systems. ZipCar customers are usually characterized by not
owning a transportation service of their own.
Private competition
Traditional car rental: Companies such as Avis, Budget, and Enterprise use the traditional
model of car rental allowing drivers to pick up and drop off cars at different locations if
needed.
Short-Term Rental: ZipCar competes directly against companies providing a similar
short-term car rentals programs including Hertz on Demand, Enterprise‘s WeCar, UHaul‘s
Uhaul Car Share, and Daimler‘s Car2Go. Regional competitors exist, such as City CarShare
in the San Francisco Bay Area, Mint in New York and Boston and I-GO in Chicago.
Peer-to-peer car sharing: Startups include RelayRides, Getaround and Uber. The first
two involve renting cars from other people. Uber, which is much better known, involves
having another vehicle and driver pick you up and drop you off.
Car services: Taxi and limousine companies compete directly by providing people with
vehicles and drivers
Bicycle rentals: In the major metropolitan areas, services has sprung allowing customers
to rent bicycles at different locations and allowing customers to drop them off at other
locations.
Public competition
ZipCar also competes against mass transit options such as bus, light rail, and rail. In the
longer distances, it can be argued that it competes against the aeronautical industry, but
ZipCar is mostly concentrated around big cities and smaller distances.
Private Ownership
ZipCar competes against private transportation ownership such as cars and bikes. People
that have means of transportation normally do not become ZipCar customers as they are able
to suffice their needs with the use of their own vehicles. Even though these are not direct
competitors, it is a source for customer exits and new customers.
ZipCar currently plays a role of a substitute service for a segment of the transportation
market. It is directly targeting customers who do not own a vehicle, who have an occasional
need to move within highly populated cities, and who are willing to pay for the flexibility
and convenience to have a service near their homes. ZipCar is looking to maximize vehicle
utilization by ensuring lots of drivers get to use the vehicle within a single day. This way
ensures a quicker return on investment to ZipCar and a pay-as-you-go value proposition to
the customer.
2. What would you say are the critical success factors for Zipcar?
Given the aforementioned competition of Zipcar, the are multiple factors that are critical
