In: Business and Management

Submitted By savitha
Words 256
Pages 2

For drivers who already share movies via Netflix and stream music rather than buying CDs, the idea of sharing a car is the natural extension of a hip, financially smart, and environmentally conscious urban lifestyle.
After all, drivers who give up their cars and switch to Zipcar say they save an average of $600 per month. Car sharers report reducing their vehicle miles traveled by 44%, according to Susan Shaheen of the University of California at Berkeley, and surveys in Europe show CO2 emissions are being cut by up to 50% per user.
Though car sharing is an audacious challenge to the whole principle of car ownership -- each shared vehicle takes up to 20 cars off the road as members sell their rides or decide not to buy new ones, says Shaheen -- the auto industry is increasingly realizing it has little choice but to play ball.

Though the primary emphasis was on convenience and cost savings, the concept could also be
marketed as environmentally friendly.

Chase spent almost two months modeling different pricing structures and cost assumptions. Her
first business plan made the following assumptions: potential users would be required to become
members and pay a $25 nonrefundable application fee, a $300 fully refundable security deposit, and a
$300 annual subscription fee. Additionally, members would be charged for driving time at $1.50 per
hour and $0.40 per mile.

goal was to direct potential customers to the Zipcar Web site. If they couldn’t handle
the Web, they wouldn't be our type of members.”…...

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