Question

Case 14.3

Technology Drives Zipcar’s Success

As a member of Zipcar, the world’s largest car-sharing service, consum ers avoid the costs associated with car ownership: gasoline, insurance, maintenance, and parking. Based in Cambridge, Massachusetts, Zipcar was founded by two moms who met when their children were in the same kindergarten class. Prior to its launch, Zipcar raised $75,000, most of which was spent to develop technology. Today, Zipcar is owned by Avis Budget and offers self-service, on-demand cars by the hour or day. The company provides automobile reservations to its 950,000 members and offers more than 12,000 cars in urban areas, on college campuses, and at airports worldwide. With a seamless user experience, it may be difficult for Zipsters (the company’s name for its members) to realize the complex tech nology that goes into making the car-sharing service so user-friendly. Zipcar relies on a number of different technologies, including mobile, web, telematics, radio-frequency identification (RFID), operational information administration systems, and phone and interactive voice response systems for support and customer service. In addition, there are teams responsible for the company’s security infrastructure, mobile app development, and auto maintenance to make sure Zipcar’s fleet of vehicles is ready for members. At the heart of Zipcar’s technologies is an operational adminis tration system. As a data-driven company, Zipcar relies heavily on infor mation to make company decisions and manage assets. The system enables the company to manage its physical assets—its vehicles—in many locations worldwide. The system provides data about car utiliza tion, when and how people are driving, specific locations, hours used, and miles driven. Using the data, analytics are performed that allow the company to optimize utilization levels. This type of information is valuable for making strategic decisions about supply and demand, including when and where to place cars, the models and types to use, and when to change them. The technology in the cars provides information that allows the company to understand how its cars are being used. Zipcar has created a telematics board for each vehicle with GPS and RFID, which supplies geographic, customer, and utilization information. Using transponders, the RFID technology works with a card reader physically placed on the car’s windshield. After the customer makes a reservation either on the web or via mobile device, the RFID card is used to enter and exit any Zipcar. This technology identifies the user and his or her car reser vation. Once the car is unlocked, the key is in the car attached to a tether on the steering column. The user will also find a toll pass (members pay for tolls) and a gas card (price of gas is included in the rental fee). Because of Zipcar’s technology, the keys can be left in the car without concern of theft. When a user enters or exits a car, hours, usage, and mileage are uploaded to a central computer via a wireless data link. However, for privacy purposes, the location of the vehicle is not tracked. In addition, all cars are equipped with a “kill” function, which allows the company to prevent theft. For security purposes, the car opens only to the designated user. With a mobile device, a user is able to unlock and lock the car and honk its horn, which helps determine a car’s location. Because 98% of Zipcar users have smart phones, mobile and web applications are integral to interfacing with customers. At the heart of Zipcar’s car sharing is a self-serve transaction that allows a user to find, reserve, and access a specific car at a specific location at a specific time. The information is then sent wirelessly to the car, and Zipcar members use their Zipcard to open the car door. Once the car is returned and locked, billing is finalized and information is made avail able to the member. It is rare that Zipsters interact directly with someone from the company because reservations happen via a mobile device or online. Providing top-notch customer service when something goes wrong re quires constant attention to innovative technology solutions. Dedicated phone systems and customer support systems are crucial for things like on-the-road issues. The Zipcar phone system identifies users who are calling, their reservations, and the cars they are driving, so that timely support and problem solving can happen quickly. Technology also supplies information about the vehicle’s service history, which helps with troubleshooting and service. As transportation needs continue to change, Zipcar is working to improve its technology base. The company remains committed to assessing consumer transportation and parking needs for business and personal use. Zipcar is focused on understanding and assessing trip-type needs, whether it is an errand for a few hours, an afternoon at the beach, or a business meeting. Using various technologies, the company has created a seamless experience for consumers who desire alternatives to car ownership. So, the next time you decide to reserve a Zipcar and drive to the beach for the day, you will have a strong support system thanks to the company’s focus on technology.

1.     What type of data does Zipcar use to make decisions on behalf of its customers? Its operations? How does the data used to make customer decisions differ from the data used to make decisions related to operations? Discuss.

2. Discuss how Zipcar manages and deals with information security. What are some of the issues the company faces with regard to security?

3.     What information does Zipcar use to manage its fleet? What information is utilized to decide which types of cars to purchase, how they will be used, and where they will be located? How might weather patterns or seasonality impact the types and number of cars the company purchases?

4.     Discuss how Zipcar leverages technology to acquire new members. Based upon its segmentation of consumers, businesses, and college students, discuss the various technologies utilized to identify the relevant target audiences and the types of messages conveyed to each of them.

Answer 1