Synergies between Zipcar’s Business Model and IT

You may read the zipcar case here: case 2.2 zipcar

What are the synergies between Zipcar’s business model and IT?

IT is applied closely in every corner of Zipcar’s business from making reservation, picking a car, and fulfilling and returning car, to paying the bills.

A customer reserves a car online, enteres into the reserved car by waving the RFID-enabled Zipcard against the card reader mounted behind the windshield on the driver side, returned the car to the same location, and is billed on the credit card already on file.

Customers can easily get detailed information to his or her rental from the online system. Customers can also easily find and reserve a nearest car using a cell/smart phone.

Their system keeps collecting and analyzing the real time information of each rental vehicle.

All cars are outfitted with patented wireless technology. Their proprietary IT platform carries information flow between customers, vehicles, and the company. It is used to monitor car security, fulfill reservations, record hourly usage, and maintain mileage information. Zipcar’s system also relays vital technical information such as battery voltage and fuel level. It even informes the central system if a customer forgot to turn off a car’s headlights, which can quickly drain battery power.

Additionally, the company built an online social community to encourage Zipcar members to share their personal experiences with Zipcar.

 

This business model provides unique advantages over traditional car rentals. The customer does not have to stand in line or fill out paperwork to rent a car. The customer knew exactly which make and model he or she would be getting. Unlike most off-airport rental agency locations, which were only open during business hours, Zipcar locations were open 24 hours. The Zipcar rates also included the cost of gas and insurance, as well as reserved parking spots at some locations. Customers’ words in the online social community helps build a good image of the company, and attract more customers to join.

Who is Zipcar’s biggest competition?

Hertz.

Membership in Connect by Hertz (Hertz car sharing club) includes insurance, fuel, roadside assistance, maintenance and cleaning.

Similarly to Zipcar, to unlock and engage the Hertz vehicle, members simply swipe their membership card, the Connect card, over the car’s radio-frequency identification (RFID) reader.

However, Hertz has a hands-free audio kit system that Zipcar does not have, which is a competitive advantage over Zipcar. “In car, a hands-free audio kit connects members to a Member Care Center representative should they have questions, need assistance or need to extend their rental. The in-car technology also enables Connect by Hertz to ‘communicate’ with the vehicle enabling representatives to unlock, engage and locate vehicles. The technologically savvy cars are also equipped with iPod connectivity and, in the US, NeverLost® in-car navigation systems and EZ Pass transponders.”(John Addison, http://www.cleanfleetreport.com/fleets/car-sharing-competition-hertz-and-enterprise-chase-zipcar, 2011)

How would you sustain a competitive advantage?

  • Keep Low rate
  • Provide new models or even customized cars
  • Develop in-car automated communication and assistance system
  • Expand to more cities, communities and universities
  • Provide other services that distinguish Zipcar from competitors

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