Zipcar: Influencing Customer Behavior

Relevant market trends in developed countries

In developed countries cars account for about 70% of all journey not made on foot. Since 2008 we have been assisting a downward trend in total consumer spending on vehicle purchase due to recession and increasing fuel prices. There is instead an upward trend in total spending on fleet vehicles (which includes car rentals, taxis, police cars and the like).

We are stepping into a new era where, as predicted by some relevant authors more than ten years ago (Riftkin, 2000), ownership is going to be replaced by access; transfer of ownership from sellers to buyers is going to be replaced by access between “servers and clients operating in a network relationship”.

According to recent studies, by 2020 the global car-sharing market will be composed of more than 12 million members, and generate overall revenue equal to US$6.2 billion (Navigant Consulting, 2012).

Cars live longer nowadays due to more reliable mechanics and technology (cars manufacturers offers now 5 years’ warranties), however the average kilometres travelled per car is decreasing (The Economist, 2012)

The main components that determine consumers’ spending on vehicle purchase are real incomes of car buyers relative to car prices, cost and availability of credit financing, cost of running a vehicle (such as insurance, fuel, parking and taxes) and consumer confidence (Riley, 2011).

New generations (Millennials, those aged 18-34) often see cars as appliances. Social networks have reduced the need to travel (Benjamin Davis, 2012). As a consequence the shifting mindset of new generations can be identified as a component of the increasing car sharing trend.

Zipcar history and services

In 2007 Flexicar, the oldest for-profit car sharing company in the US, merged with Zipcar.

In 2013 Avis Budget Group purchased Zipcar for about US$500 million in cash. Despite keeping its own brand, Zipcar operates as a subsidiary of Avis Budget Group.

Zipcar is the...