Disruptive Forces: Zipcar

By Chris Gonsalves Print this article Print


Location: Cambridge, Mass.

CEO: Scott Griffith

Revenues: N/A (private)

What they do: In just seven years, Zipcar’s car-sharing service has lured more than 180,000 members—mostly city dwellers and college students—who take advantage of self-service vehicle rental as an alternative to the costs and hassles of car ownership. As a result of its merger with rival Flexcar late last year, the company now boasts more than 5,000 vehicles in 50 cities across the United States, Canada and the United Kingdom.

Disruptive qualities: It took the convenience and ease of Zipcar’s service—made possible by the company’s sizeable investment and clever reservation technology—along with savvy inclusions such as insurance and gas to make car-crazy Americans even consider giving up their wheels.

The tech that makes them tick: Zipcar recently overhauled its proprietary Z3D Knowledge Center, the system that manages its fleet and all customer interactions, from the Web site to the vehicle. The new system is faster, and it provides targeted search results, one-click rentals, vehicle photos, reservation times and costs, maps and user instructions. “The upgrades to Z3D and back-end systems are based on the experience of processing 1.5 million reservations,” says Griffith. The company also carefully analyzes the cost of parking, public transit availability and the scale of a metro area. In addition to big East Coast cities, most of Europe (especially France, Spain and northern Europe) look very attractive to Zipcar.

Who they are disrupting: Zipcar is taking business from the big auto makers, auto insurance providers and rental giants such as Hertz, Avis, Budget and Enterprise. Why pay day rates when you need a car for only a few hours?

A road less traveled? Much as Zipcar would like to give everyone the chance to forsake car ownership, some of the country’s most well-heeled markets will never be good candidates for the business. Places such as Houston, Dallas and Denver will remain “driver cities with big interstates as opposed to good transit,” Griffith concedes.

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This article was originally published on 2008-03-27
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