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n April 2011, the car share company Zipcar raised $174M from a successful IPO, over twice the company’s original estimate of $75M. This was an expression of investor confidence for Zipcar’s goal of getting people to think about car sharing as an alternative to car rental and car ownership. As Zipcar puts it ‘car rental is so last century’ . That there is something new about Zipcar’s value proposi- tion has been picked up by The Economist in an article called ‘The business of sharing: What do you do when you are green, broke and connected? You share’. It discuss- es an emerging business model, adopted by companies such as Netflix and Zipcar,


based on


consumers renting things, rather than buying things. This business model is supported by cutting- edge IT systems and ready access to capital. To lower costs, the company announced the creation of Zipcar Vehicle Financing . Zipcar’s services are mainly available in the US, though there is also some coverage in Canada and England. In our Environmental Choices survey we measured the awareness and usage of car share brands, and the study showed that in late 2008, Zipcar was rec- ognised as a car share organisa- tion by 13% of Americans, 11% of Canadians and 2% of English people. The survey also indicated that around 1.5% of Americans had actually used Zipcar by that time; these being members, or presumably their family, friends and other passengers.


The Americans who are partic- ularly likely to be aware of Zipcar are those living in a city centre, to be from the New York/New England area, and to be younger men without children. They are also somewhat more likely to vote Democrat, more likely to be well- educated and more likely to be Climate Citizens; the group most concerned about climate change. Indeed, in North America there already seems to be a car sharing ethic amongst green-minded peo- ple. In households of two adults or more, there are significantly


16 | Sustainable Business | June 2011


Does the Zipcar model provide a blueprint for 21st-century businesses


by Peter Winters


public’s attitudes. Whereas 36% of English people strongly believe they ‘really need their own per- sonal car’, this proportion rises to 46% amongst Americans and 54% amongst Canadians. It will be interesting to see if Zipcar develops as a niche trans- port option, or whether it can broaden its appeal to other demo- graphics, such as with families requiring car seats. It will also be interesting to see how well the Zipcar service works outside North America. Yet the broader interest in what Zipcar is doing is whether it pro- vides a blueprint for other 21st -century businesses. Can more companies develop compelling consumer


Zipcar’s website


fewer cars per person where the respondent is a Climate Citizen, compared with those where the respondent is Sceptic/Uninvolved about climate change.


Yet Americans aware of Zipcar are far from being broke. In con- trast to the theme of the Economist article, they are also much more likely to have a household income in the highest bracket – in excess of $100,000 per year.


Within their IPO filing, Zipcar rightly draw attention to the risk that ‘the rate of adoption and our associated growth in our cur- rent markets may not be rep- resentative of rates of adoption or future growth in other mar- kets’. America has a transport


infrastructure geared to cars and Zipcar may be meeting an acces- sibility need amongst Americans which is not nearly so pressing in other countries. According to the Environmental Choices sur- vey, just 2% of English people are not in moderate, 20-minute walking distance of some form of public transport – whereas the equivalent figures for Canadians and Americans are 16% and 36% respectively.


In some parts of the US, such as the Deep South, the majority of people are isolated from public transport in a way that is really not experienced by people liv- ing in England. This difference in accessibility is reflected in the


on leasing resources, enabled by smart technology and creative financing? Maybe owning all the stuff we have is very last century? Maybe the modern way is to rent stuff when we want to use it? Maybe we will not feel so inclined to use a car when the charge is on an ongoing basis rather than mostly in the initial purchase?


Peter Winters is president of Haddock Research & Branding. Haddock Research is a leading market research agency dedicated to providing vital information to those creating a low-carbon world. SB readers can claim a 15% discount on Environmental Choices reports, available now at: http://haddock-research.com/ environmental_choices/ section_reports


propositions based


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