ZipCar: Industry subversive marrying a traditional car-rental giant reflects what

At the start of 2013, Zipcar, who prides itself on being at the forefront of global auto-sharing, announced that the company had been bought by Avis, a traditional car rental company, at $12.25 a share, at a price of about $500 million.

All along, Zipcar subversion of the traditional business model has quietly changed the car sales and consumption tradition, and has been labeled as "industry subversive" label. "I grew up in Pittsburg and witnessed the decline of the steel industry in the the 1980s," Griffith, CEO Scott Griffith Scott, when Zipcar revealed its burgeoning momentum in 2006. I never wanted to work in a company that was dying, "Scott said. "I have a special interest in creating new areas, especially in the hope of bringing some kind of change to the industry," he said. ”

Zipcar really changed the way the traditional car rental industry was. Its services are billed by the hour (rather than by day or week) and are provided only for members who pay annual fees, and can be said to have led a new generation of consumer groups to "Rent life" trends. Eager to "rent" young people, relying on the internet to bring opportunities to share, in the house, fashion clothing, High-tech products-and even car consumption will be "purchase" into a "rental" way.

Zipcar cars are usually parked in a crowded area, users need to use the car, you can directly through online inquiries to get the car car condition, after booking directly to the parking place to pick up cars, after the car to drive back to the parking space, the whole membership card can act as the induction door key. By contrast, a lot of traditional car rental service providers to get cars, return cars need human involvement, the user experience also less autonomy.

It was such an "industry-changer", welcomed by the Internet-era consumer, that in 2011 it traded at $18 a share, which then soared to $30. Peak market value equivalent to 1.5 after being Avis acquisition price of more than four times times! So, in such a short time, it has committed to marrying a car-rental company that sticks to traditional commercial positions – and what does it mean for Zipcar, the industry magnate who swore to overturn it?

Wall Street seems to have always had a sense that it would be a matter of day before the profits of a subversive tradition were to be realized. Unfortunately this did not happen on the Zipcar. During the period from 2000 to 2010, Zipcar a total of nearly 67 million U.S. dollars in venture capital, but from start to finish did not reach the break-even point, only 2007-2011 fiscal year, the loss of more than 55 million U.S. dollars. The key pain point is that it does not quickly build a large enough membership, which not only affects revenue, but also leads to a loss of bargaining power between buyers, insurance and upstream service providers.

The reason for not attracting enough members is that the Zipcar business model is "cool", but the gap between the "peak" and "valley" of vehicle availability is hurting the customer experience. In other words, Zipcar is particularly popular among college towns and young consumers, but because of the limited supply, in the weekend, at the end of the semester, holidays and other peak periods, most of the time users do not have the car. This requires the user to book early in front of the car, which is obviously difficult-as long as you think back to your college life, college students rarely think or plan ahead.

No doubt, Avis's takeover of Zipcar in the U.S. market has sparked a lot of discussion. There is optimism about synergies between the two sides, such as many car rental industry observers believe that with the takeover of Avis, the Zipcar face a number of problems that will be solved, and that the latter should (or should) move faster toward the goals that they have been expecting. A blog posted on seeking Alpha said that if there is a strong belief that the hourly car rental market still has great demand, Avis is likely to inject real capital and the management of large companies into Zipcar's innovation, and to understand the use of Zipcar users and information technology, will also bring great business opportunities to Avis.

There is of course a sigh of regret for the deal, which is largely from Silicon Valley, which has been lamented by industry makers as a harbinger of ruin for an "innovator". However, I do not think so. The intrinsic value of the "subversive" should be its ability to improve the user's life, rather than erode the market share of the person who is the real "cool". This point, from the "buy" this concept began to be reflected in a single group buying network, and then the comprehensive category of life services to participate in group buying business and from behind the ecology can also be seen.

The deal, like Avis mergers and acquisitions, reflects the market's acceptance of improvements to the industry's Zipcar, rather than the setback of the business. Most of the time, a "cool" product can go farther and play a more practical and efficient value if it is well managed, or in the hands of a large company, along with the necessary provisioning (tilt). (The opposite, of course, is shortage.) ）

Let's look at how consumers react. It is not hard to imagine that for many Zipcar loyal fans, will their beloved brand be ruined by this merger? This is the most instinctive reaction. As Facebook commented: "I thought the whole idea of Zipcar was to give people a new option outside the traditional car rental ... But at the moment, does the company's top brass forget this? Is it really ' money, business interests above users '? ”

In fact, Avis mergers and acquisitions Zipcar have been hit hard by the latter's loyal users, in many ways similar to other acquisitions in the near future. In the summer of 2011, the United States First Capital Investment International group was buying the emerging online bank ing Direct. Many users of ING direct panicked, many of the policies that are afraid of ING direct (such as no fees, attractive interest rates, and good customer service – which are also the reason they love online banking – are wiped out by the annexation of a giant company known for its "poor service attitude". Luckily, ING Direct has retained most of the above services since the merger, and Capital One has no reason to sell customers or transfer to other banks ... Of course, no one can guarantee that change will not happen, and any new and unfriendly customer service policy may happen at any time. "This article is published in" IT Manager World "February 5, 2013, signed by China International writer. The