Zip Car

2645 Words11 Pages
Executive summary Zipcar provides a car-sharing service that members pay annual fees and usage fees and they use Zipcar service independently. Recently, late returning of cars has been a major problem of Zipcar operation. Through situational analysis, it was identified that Zipcar must find a way in its operation to influence customer behaviour and the company should develop strategies which can encourage its customer’s on-time return behaviour. Three major factors of the car-sharing service industry; customer convenience, vehicle availability, managing operation process were used as criteria to evaluate alternatives along with cost effectiveness and company’s long term sustainability. Although Zipcar has already adopted few…show more content…
Its on-line reservation provides convenience to customers and the company has its own parking spot so customers rarely get confused with finding a car. Moreover, Zipcar applies high technology to their services such as GPS and AT&T wireless network. Zipcar uses GPS-based mobile that allows members to view and reserve Zipcar’s worldwide fleet of vehicles based on their current location. The system was developed in partnership with uLocate. Furthermore, Zipcar uses AT&T’s wireless data network to serve customers timely and cost effectively. (Appendix 4) However, Zipcar is still facing challenges that the company cannot improve late returning behaviour. Nevertheless, it is obvious that the market is growing with 1,500 new customers on average per month, and Zipcar will be able to expand its market and number of fleets through current merge with Flexcar. On the other hand, Zipcar is also facing threats such as rising gas price ,which affect its operational costs as well as Zipcar’s late returning penalty ,which may increase customer dissatisfaction rate; customers may leave to other competitors. (Appendix 4) As mentioned previously, one of the major problems Zipcar must solve is reducing late returns. Zipcar currently subjects penalty to customers who return their cars late without reservation extension approved. Zipcar charges fees of $50 plus regular hourly
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