Even the records had to be kept and maintained manually by the members for billing purposes instead of the wireless based billing system as originally planned for Zipcar.Īs far as the cost model was concerned, customers found the $300 annual deposit too high and it had to be reduced to $75 per year. The keys had to be left in the glove compartment for each car as well as the wireless system was not developed yet. For starters, the complete technology platform had not been implemented before the launch and so the system which was introduced initially did not have car specific zipcards. When the actual model was put into practice, several changes had to be made in the original plan of December 1999. The costing model was developed to cover the overheads and the costs of goods sold. The original charges per hour were decided at $1.5 and the per mile charge kept at $0.4. The initial plan in Dec 1999 was to charge $25 as the non-refundable application fee along with $300 as a fully refundable security deposit from each member along with annual charges of $300 per member. The system was to capture information about the car in the form of usage per miles and hours which was then sent to a central location for billing. Originally the business model was based upon a wireless technology platform which would allow members to make online reservations and access cars at designated parking spots through specific zipcards. The critical success factor for this business is the ability of the service to attract the target market with its low cost and convenience driven model since the business would require a regular revenue stream for a successfully covering the costs and generating a positive inflow.Ĭhase has managed to launch the idea even though the wireless platform has not been developed yet which shows that she did not want to let the company down by postponing the launch of the service and this shows considerable effort on her part to have taken this strategy and idea forward as a potential business venture This shows how the initial investment was not worked out well and neither were the sources of finance planned out effectively.
Even then the business requires an additional investment of $1.3 million for being built on the pattern as originally planned out by the entrepreneurs. This business model has already used up $50000 as the initial investment in the form of cash borrowed from friends while an additional contribution of $375000 was made by a venture capitalist. Corporate overheads are expected to be $44000 per month while the Boston office alone has overheads of $14000.
#Zipcar support software
There are additional variable costs in the form of fee for consultants and software developers for developing the wireless technology system for the business but these would be non-recurring costs since they only have to be incurred till the development is complete.
#Zipcar support drivers
The main cost drivers (Appendix 2) in this business model are in the form of corporate overheads and cost of goods sold such as lease costs per car, fuel, insurance and maintenance for the cars along with parking and equipment charges for each car. Additional revenue heads include late fee charges.(Appendix 1 ) The major impact on the revenue is from an increase in memberships which not only leads to an increase in security deposits but also to a potential rise in variable revenue heads such as per hour/mile charges. The multiple revenue streams in this model include revenue from an annual membership fee, application fee for new members, security deposits and variable income in the form of charges per mile and hour. This car sharing service allows members to access cars parked at designated spots through zipcards which are issued to members and provide convenience to individuals who do not own a car and yet do not want to go through the hassle of keeping a private car. Chase’s care sharing venture, Zipcar, is a typical example of a revenue model with multiple revenue streams.
0 kommentar(er)
