Research Information on:

Zipcar
 Zipcar

Service launched in Overview:

Boston in 2000 Zipcar is a car sharing service founded in 2000. It is the global car sharing leader with over 1,000,000 members
and operations in over 500 towns and cities. It describes itself as a pay-as-you-drive car club
Background:
Zipcar was founded in 2000 by Robin Chase (an MIT MBA graduate and stay at home mum) and Antje
Over 1,000,000 Danielson (a Harvard geochemist)
The two Boston mums met in the park where their children played together; they teamed up to bring to
members in more life an environmentally friendly car sharing business. Chase fired Danielson from the business in 2001, and
than 500 towns in Chase herself was in turn fired by the Board in 2003 (read more about the founder drama here)
The company owns a fleet of vehicles that are housed at key depots around a city and shared by
seven countries members. It distinguishes itself by its self service model, where you gain access to a car 24/7 It operates a
global membership of drivers who share cars in more than 500 cities in the UK, US, Canada, Spain,
Belgium, Turkey and Taiwan
Acquired by Avis Zipcar has predominantly grown by acquisition (more on their acquisition history on the next slide)
The company had its Initial Public Offering in April 2011
Budget Group in Currently it offers three types of membership services: for everyday consumers; for businesses; and for

References
2013
https://www.theverge.com/2014/4/
1/5553910/driven-how-zipcars-
founders-built-and-lost-a-car-
sharing-empire
http://bit.ly/2sMXaka
http://www.zipcar.com/compare-
plans/boston
http://www.zipcar.co.uk/check-
rates/london
https://www.zipcar.co.uk/press/med
ia-kit
https://www.crunchbase.com/organ
ization/zipcar#/entity
universities. Zipcar boosted its ability to service businesses with its 2015 acquisition of fleet managemetn
start up Local motion
Zipcars current fleet has over 12000 cars with 50 makes and models of cars on offer
Commercial Model:
The company operates using a membership service. It derives revenue from three sources:
i. Once off member joining fee currently $25 in the US and 19 in the UK
ii. Monthly membership fees. There are three plans available: occasional driving (annual fee of $60);
monthly driving plan ($6 or 6 per month); extra value plan ($50 or 15 per month)
iii. Hourly and daily driving rates. These rates vary by the make and model of the car and by
membership plan. Members on a value plan getting a discount of 10% on the rates charged to
basic plan members
Zipcar membership includes petrol, insurance when driving the car and a certain allocation of free
kilometres
1
 Zipcar

Competitors Key Competitors:

include: Hertz Zipcar competitors vary by market, and include other sharing companies owned by rental
companies and pure play car sharing clubs. Its competitors include:
24/7; Turo; Maven Enterprise Car Share (United States)
Hertz 24/7 (United States, United Kingdom)
Turo (United States)
Company has Maven, the General Motors owned car sharing company (United States)
grown by
acquisition buying Investors:
Prior to its 2011 IPO, Zipcar had raised USD107.7 million in investment
4 competitors Notable investors included: Benchmark, Greylock Partners and Pinnacle Ventures

Key acquisitions:
References Zipcar has made several acquisitions enabling its expansion to new cities and into new
http://old.seattletimes.com/html/bu service lines. Under previous CEO Scott Griffith the company favoured the instant
sinesstechnology/2003984391_flexc growth that came with acquisition. Zipcar has bought the following companies:
ar31.html
o 2007: flexcar (Seattle, San Francisco and other West coast cities)
http://www.reuters.com/article/us-
zipcar-acquisition-carsharingat-
o 2010: streetcar (was at the time the largest UK car sharing company)
idUSBRE86A0EO20120711 o 2012: carsharing.at (Austria)
https://www.earthsfriends.com/ente o 2015: local motion (fleet management business)
rprise-carshare-vs-zipcar-vs-car2go-
vs-turo-vs-getaround/
https://techcrunch.com/2015/08/25
/zipcar-buys-fleet-management-
startup-local-motion/
2
 Zipcar deep dive acquisition by Avis Budget

In 2013 Avis paid USD500 Deal details

million for ZipCar In 2013 Zipcar was acquired by Avis for USD500 million cash transaction ($12.25 per share)
Then Avis CEO, described the car sharing market as a subset of the broader car rental market and
significant force
Acquisition was part of a Broader market trends
consolidation trend in the The transaction was part of a broader consolidation trend in the global car rental market place
broader car rental Avis itself had merged with Budget in 2002; Hertz had bought competitor Dollar Thrifty in 2012. Three
players now control the US rental car market: Avis Budget; Hertz and Enterprise Rental
industry
Other players in the auto industry have gone on to create or buy car sharing companies. Notably, in
January 2016 General Motors launched its own car sharing service, Maven and invested in Uber rival Lyft
Expected synergies
Expected annual savings The Zipcar acquisition allows Avis to expand its addressable market by adding car sharers who rent cars
of $50 70million in units as low as 30 minutes, rather than the conventional car daily rental periods
Avis Budget bought Zipcar with the expectation of generating $50 70 million in savings annually
through the following synergies:
o Higher fleet utilisation rental cars are only useful for their first 25,000km or first six months, after
which they have to be disposed of. Through buying Zipcar, Avis is able to get more from its cars
References before selling them (i.e. increase its fleet utilisation) by moving cars to the Zipcar fleet after the
http://bit.ly/2sFwKpE end of their useful rental period, squeezing a bit more out of them before then selling
o Expansion of the Zipcar fleet Zipcar had a small fleet (11,000 cars globally), sometimes running
http://www.zipcar.com/press/releas
es/avis-budget-group-acquires- out of cars on weekends in certain locations. The company could capture this revenue by tapping
zipcar into the Avis fleet to expand its availability
o Lower procurement costs Avis will be able to lower Zipcars cost of buying cars because Avis
https://www.ft.com/content/0dd878
ce-c030-11e5-9fdb- receives very deep discounts from car manufacturers. Zipcars fleet is too small for them to get
87b8d15baec2?mhq5j=e2 such big discounts, but with the backing of the Avis might, they will get larger discounts and be
https://www.forbes.com/sites/timw able to expand into more cities faster than a stand alone Zipcar would have been able to
orstall/2013/01/02/explaining-the- o Costs of being listed Zipcar was independently listed on NASDAQ and so there are expected to
avis-takeover-of- be cost savings from no longer having to meet the requirements of a publically listed
zipcar/#18ed8abf7986 o Zipcar is the leading brand in the car sharing segment, in Paris, Avis had been operating a car
https://www.ft.com/content/f29046 sharing service Avis on Demand with the acquisition, this was rebranded to Zipcar
c0-54e2-11e2-89e0-
00144feab49a?mhq5j=e2 3
Insert Business Logo Platforms

Web interface Mobile interface

4
 The experience of booking a car 1 of 2

Zipcar is a membership community and so you have to register onto the service before you can share cars. To register you need to
select your primary city and provide drivers licence details. Once registered, you can sign in (1), browse the range of cars (2) , book
one, and select your pick up point and time (3) all via the app or website. The app also allows you to unlock the car once youve
located it (4), drive it and track your trip (5).

1 2 3 4 5

5
 The experience of booking a car 1 of 2

What I liked about the service: What I did not like about the service:

Easy to view the range of cars or vans and book
one within the app or on the website
Once you were signed up on the platform it was
quite easy to book a car
Since 2016, everything is integrated to the Zipcar
app. You use either the app or your Zipcard to
lock and unlock your car
The sign up experience is a bit less than
seamless, it is web browser based and then
there is a delay while you are being vetted (this is
a minor complaint)
You are required to return the car at the same
place you picked it up (i.e. one way trips are not
possible), they have just launched a flex service
in London that allows one way trips

In the US, most cars have a fuel card inside them

that allows you to buy petrol without paying out
of pocket. If you do have to pay out of pocket,
e.g. the card does not work, you will be
reimbursed

6
 Selected Recent News

Zip car more generally

Car rental giant Zipcar to enter Taipei market (The China Post, May 11 2017)
Zipcar expands into the Asia market launching its service in the Taiwanese market
Chinas Didi partners with car rental giant Avis ahead of planned global expansion (Techcrunch,
November 15 2016)
Avis announces a partnership with the uber of China to allow Didi users to book Avis rentals for their
overseas trips within the Didi app
Avis Budget Shares hit speed bump on larger than expected losses (Financial Times, May 3 2017)
The companys quarterly returns were less than anticipated on the back of higher fleet costs and price
pressure
Zipcar shares jump on first day of trading (Financial Times, April 15 2011)
Zipcar went public in 2011 with its shares being listed on the NASDAQ, they were up 87% on debut

2013 Acquisition by Avis

Explaining the Avis takeover of Zipcar (Forbes, January 2 2013)
Outlines the synergies of Avis Budget Groups 2013 acquisition of ZipCar. The main ones are better
fleet utilisation and the ability to get larger discounts from car manufacturers
Avis Budget to buy Zipcar for $500 million (Financial Times, January 2 2013)
Then Avis Budget Chairman and CEO Ronald Nelson gives a rationale for the acquisition, saying, Ive
been somewhat dismissive of car sharing in the past, but what I have come to realise is that car
sharing is complementary to our traditional car rental model.