Instructions: Read the ZIPCAR case study and answer the questions at the end of the

document. This assignment is worth $20$ points.

ZIPCAR: Delivering only as much driving as you want

Adapted from ZIPCAR Case Study: Grewal & Levy. $(2013).$ Marketing, $4$th ed$.$

Historically, the expectation that your car will be waiting for you at the curb every

morning got hard$-$wired into many Americans with the growth of the auto industry. But

that expectation has gone haywire by now for many city dwellers, who have been

frustrated by the soaring costs and parking pressures that confront modern drivers. For

them, Zipcar, the world$$s leading car$-$sharing company, offers the pleasure of driving

without the hassles of ownership.

The Cambridge, Massachusetts$-$based company rents self$-$service vehicles by the

hour or day to urban residents who prefer to pay for just as much driving as they

absolutely need. Car sharing eliminates issues related to parking shortages; overnight

parking restriction; or soaring gas, insurance, and tax bills. That promise resonates well

with consumer expectations on many fronts, especially among Zipcar$$s primary urban

customers, the large segments of college students who also enjoy the service, and even

suburbanites who just work in the city.

Still Zipcar CEO Scott Griffith realizes that the company$$s biggest growth obstacle

is Americans$$ inability to envision life without a car. To push an attitude shift, Zipcar

makes the car$-$sharing experience as easy as possible, with just four simple steps:

$1.$ Join the network.

$2.$ Reserve your car online or from your smartphone.

$3.$ Unlock the car with your Zipcard.

$4.$ Drive away.

Today the car$-$sharing network has more than $650,000$ members and $9,500$

vehicles in $13$ major metropolitan areas and on $150$ college campuses throughout the

United States, Canada, and Britain. With so many locations, the company could bring

convenient car sharing to a far larger market; it estimates that $10$ million residents,

business commuters, and university students no live or work just a short walk away

from an available Zipcar.

Zipcar is banking on more than shifting attitudes. Emerging trends due to the

economic downturn and changing buying habits have helped spur growth. On average,

automobiles use $19\%$ of household incomes, yet many cars stand idle for $90\%$ of each

day. Drivers seeking a less expensive and less wasteful alternative thus might save up to

$70\%$ on their transportation costs, because an annual Zipcar memberships costs just

$$42,$ and the average member spends $$428$ a year.

Zipcar$$s service model fits in with the emergence of on$-$demand, pay$-$per$-$use

options, such as Netflix for movies, Spotify for music, and e$-$readers for books.

Moreover, the popularity of mobile shopping and the growing expectation that they can

order anything, anywhere, anytime from their smartphones have made urban young

adults and college students two of Zipcar$$s most fervent member groups. For these

$$Zipsters$,$ ordering up a set of wheels on the go is far more appealing than being

saddled with car payments.

A strong urban public transportation system also helps make car sharing more

attractive. That$$s why Zipcar started off in high$-$density urban areas such as Boston, New

York, and Washington, DC$,$ with their great public transportation systems already in

place. Wherever subways and buses work, car sharing can extend the transit system$$s

reach. By locating cars near transit route endpoints, travelers gain an easy extension on

subway or bus schedules to their final destinations. Zipcar even offers members an

overnight option, for grabbing a car in the evening and returning in the next morning.

Finally, the logic of car sharing works well in settings marked by increased

urbanization. According to the United Nations, cities will contain $59\%$ of the world$$s

population by $2030.$ Many of these areas already face congestion, space demands, and

environmental threats from crowding too many gas$-$driven vehicles into a small,

population$-$dense space. Griffith estimates that every Zipcar would replace $15-20$

personal cars. Thus, some cities work with Zipcar to identify and secure parking spaces

close to subway stops and rail stations. New York and Chicago also rent Zipcars for

municipal workers so they can shuttle more efficiently across city locations during their

workday. Zipcar also provides fleet management services to local, state, and federal

agencies.

Car sharing could translate into a $$10$ billion market globally. Cities in Europe

and Asia are well primed for car sharing, by virtue of their strong rail systems, heavy

reliance on public transit, and widespread adoption of mobile and wireless technologies.

A deal with Spain$$s largest car$-$sharing company, Avancar, is a first venture in Zipcar$$s

planned global expansion.

Such growth requires strong logistics$,$ and Zipcar is backed by a corps of fleet

managers and vehicle coordinators who track, schedule, and oversee vehicle

maintenance; proprietary hardware an