atlaw4u
04-16-2008, 04:09 PM
Car-sharing company emphasizes lifestyle over environmental impact. (http://www.msnbc.msn.com/id/23747341/)
http://www.cleanmpg.com/photos/data/501/ZipCar.jpgAlex Frankel - MSNBC - April 15, 2008
If there is a phrase that describes the Zipcar car-sharing service — and I don't think there is yet — it would be some mix of Volkswagen's Fahrvergnügen (driving pleasure) and Napster "Own Nothing, Have Everything" advertising slogan. The experience is what it is all about: I reserve a Mini Cooper online, walk one block from my house in San Francisco to a car lot, swipe my card across the windshield, get in, adjust the seat and mirrors, and motor off. For $11 an hour, my insurance and gas are covered. By block two, I'm thinking of selling my station wagon. Turns out, I'm far from alone. "Forty percent of our customers either sell their car or halt a purchasing decision of a car," says Scott Griffith, Zipcar's CEO.
Griffith, 48, has spent the last decade laying the groundwork for the moment when that question — Would I really get rid of my car? — doesn't sound so crazy. Late last year, Zipcar merged with Flexcar to become the nascent industry's dominant player. The combined company has 180,000 members, who pay at least $50 a year to access cars in 50 cities in the U.S. and the U.K., and is expected to hit $100 million in revenue this year. Integrating the two services should be completed this month.
Revved up for the future
Now Zipcar is ready to shift into second gear driving toward an IPO, 2 million customers, and $1 billion in annual revenue. High oil prices and environmental concerns should ease its path, but even though Zipcar's mission is to take cars off the road, its bid for the mainstream soft-sells the green benefit in favor of the total experience. "We know we're up against an ingrained culture," Griffith admits. "It's a rite of passage to buy a car when you graduate college."
To that end, Griffith's strategy is to intercept customers before then. "We're borrowing from Apple's early days," he says, "when it went after students to be its early adopters." Zipcar is available on 70 college campuses, including such behemoths as Michigan, Ohio State, UNC, and Florida. Griffith expects that number to grow "by a factor of three to five" in the next year or two.
He woos universities to give him prime campus parking spaces as a money-saving hedge against having to build more parking structures. MIT, for example, estimates that it has saved $9 million in capital costs through its alternative-transportation program, which includes Zipcar. Griffith attracts students with cars that they might aspire to own one day, from 3- and 5-Series BMWs to pickup trucks, and the promise of cost savings. "Economics and convenience drive choices, not green," he says, citing that his average customer uses the service two or three times a month, spending less than $100.
The real payoff, then, comes after graduation day. Almost half of Zipcar's college customers move to a major-metropolitan area that Zipcar serves or plans to serve. Many of them continue their membership. "There's a tremendous opportunity to extend that," Griffith says. "We want to fit into a smart, urban lifestyle." The long-term vision is to leverage its lifestyle-brand status to create other revenue streams.
Born during dotcom era...http://www.msnbc.msn.com/id/23747341/
http://www.cleanmpg.com/photos/data/501/ZipCar.jpgAlex Frankel - MSNBC - April 15, 2008
If there is a phrase that describes the Zipcar car-sharing service — and I don't think there is yet — it would be some mix of Volkswagen's Fahrvergnügen (driving pleasure) and Napster "Own Nothing, Have Everything" advertising slogan. The experience is what it is all about: I reserve a Mini Cooper online, walk one block from my house in San Francisco to a car lot, swipe my card across the windshield, get in, adjust the seat and mirrors, and motor off. For $11 an hour, my insurance and gas are covered. By block two, I'm thinking of selling my station wagon. Turns out, I'm far from alone. "Forty percent of our customers either sell their car or halt a purchasing decision of a car," says Scott Griffith, Zipcar's CEO.
Griffith, 48, has spent the last decade laying the groundwork for the moment when that question — Would I really get rid of my car? — doesn't sound so crazy. Late last year, Zipcar merged with Flexcar to become the nascent industry's dominant player. The combined company has 180,000 members, who pay at least $50 a year to access cars in 50 cities in the U.S. and the U.K., and is expected to hit $100 million in revenue this year. Integrating the two services should be completed this month.
Revved up for the future
Now Zipcar is ready to shift into second gear driving toward an IPO, 2 million customers, and $1 billion in annual revenue. High oil prices and environmental concerns should ease its path, but even though Zipcar's mission is to take cars off the road, its bid for the mainstream soft-sells the green benefit in favor of the total experience. "We know we're up against an ingrained culture," Griffith admits. "It's a rite of passage to buy a car when you graduate college."
To that end, Griffith's strategy is to intercept customers before then. "We're borrowing from Apple's early days," he says, "when it went after students to be its early adopters." Zipcar is available on 70 college campuses, including such behemoths as Michigan, Ohio State, UNC, and Florida. Griffith expects that number to grow "by a factor of three to five" in the next year or two.
He woos universities to give him prime campus parking spaces as a money-saving hedge against having to build more parking structures. MIT, for example, estimates that it has saved $9 million in capital costs through its alternative-transportation program, which includes Zipcar. Griffith attracts students with cars that they might aspire to own one day, from 3- and 5-Series BMWs to pickup trucks, and the promise of cost savings. "Economics and convenience drive choices, not green," he says, citing that his average customer uses the service two or three times a month, spending less than $100.
The real payoff, then, comes after graduation day. Almost half of Zipcar's college customers move to a major-metropolitan area that Zipcar serves or plans to serve. Many of them continue their membership. "There's a tremendous opportunity to extend that," Griffith says. "We want to fit into a smart, urban lifestyle." The long-term vision is to leverage its lifestyle-brand status to create other revenue streams.
Born during dotcom era...http://www.msnbc.msn.com/id/23747341/