How Mobile Tech is Driving Zipcar Into the Future

Bloomberg News

Since launching its first mobile app on the iPhone three years ago, “We were almost shocked by how fast things took off,” Griffith said in an interview last week with Venture Capital Dispatch at the MIT Sloan CIO Symposium, where he was a panelist. Now “zipsters,” aka Zipcar customers, transact via mobile devices 60% of the time instead of computers. The company has seen 800,000 downloads of its iPhone and Android apps.

That enables Zipcar to offer more features, such as a service that provides members with a picture of the building where their Zipcar is parked. As electric vehicles become more common, mobile services could also ease consumer anxiety about whether they have enough power to make it to the next charging station, Griffith said.

“Today we’re thinking holistically about how will the entire business be run off a mobile device,” he said, including the back-office operation that ensures cars spend as little time as possible in the shop. Zipcar started by using RFID tags for member identification, but smartphone technology will enable customers to be recognized by their devices, permitting almost instant sign-up for a Mini Cooper, Prius or other Zipcar.

Zipcar measures its market by the number of people who can walk to a Zipcar in less than 10 minutes. That computes to about 10 million people, the CEO said, and Zipcar has signed up fewer than 1 million of them. “It’s a marketing challenge but technology can help,” he said.

Griffith said when he looks at a car, he sees an IP address. “It used to be that the technology on the car itself was important to us,” he said. “We’re thinking now about that as being more of a commodity and what is high-value-added is how the technology on the car interacts with the rest of the Zipcar system and how it interacts with you as the customer, probably through a smartphone device, mobile Web or app.”

“We run the biggest connected-car fleet in the world,” he said and automakers can look to Zipcar as a test market. Zipcar’s customers, generally in their mid 30s, see the iPhone as the ideal model for a car dashboard, one that can be easily customized.

“Our ability to personalize the Zipcar experience is trending up now through these new technologies,” he said. “What we’re talking to the car manufacturers about is the car-sharing vehicle of the future should be open.”

Zipcar, a venture-backed company that went public in April 2011, faces plenty of challenges as car companies and start-ups alike look to improve on its model. But Griffith sees that as an opportunity for his company. It recently invested in car-borrowing service Wheelz.

Griffith said consumers are changing how they think about mobility. “It used to be you made one big mobility choice, you bought a car, and then you figured out how to use it when you needed it,” he said. “Now what we’re finding is people are seeing mobility as a service instead of mobility as a product, a car that I buy; mobility as a series of five or six services that I choose from—that’s a very different way for consumers to think. We think we can make their lives simpler, and frankly more affordable, especially if they’re in a city, by helping them think through these mobility options. I think that’s what the venture community is starting to see.”

Wheelz can expand car-sharing to suburban and rural areas where operating a fleet of Zipcars is not practical. In cities, peer-to-peer car-sharing could be used for peak-demand periods when Zipcar sometimes finds its vehicless fully booked, which could be a game changer for his business, Griffith said

“I think what’s next is more and more consumers becoming mainstream about this idea of I personalize my mobility around a series of options,” he said. “How do you integrate that so it’s not a bunch of siloed offerings? Someday, I think the consumer is going to ask for more integration around that.”

Also, he said, car makers will come to see their product more as a service: “Someday you could envision the car makers saying if you buy a car and you want to put it into the peer-to-peer car-sharing system, it will come with that technology…Then all we have to do is just light it up.”

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