Table of Contents
“Robin Chase Zipcars and an Uncomfortable Discovery”
Problems
Alternative Solutions
Proposed Solutions
The reason
“Robin Chase Zipcars and an Uncomfortable Discovery”
Deborah Ancona (author) and Cate reavis (co-author) describe how Zipcar was formed, a company that provides car-sharing services in Cambridge Massachusetts and Boston. This article provides a case-study of the formation and challenges faced by the car-sharing company. The authors mention that Robin Chase, Antje Danielson and Jean Hammond were the founding partners of Zipcar. The car-sharing company’s co-founder, four months after its launch, was shocked at the results of the business. Chase discovered that the company generated less revenue than its founders expected. This discovery reveals a variety of issues that have affected Zipcar. The case also reveals alternative solutions and suggested solutions.
IssuesZipcar’s leadership spent a large amount of time on the design of its website, forming a pricing strategy and raising investment money (Ancona-Reavis, 2014). The company did not invest in the technology it needed to succeed. Zipcar was in need of technology to help connect car-sharing users. In order to invest in this technology, the company had to be very young. Chase, a co-founder, failed to take this into account because her and her team’s time was spent on creating websites and raising capital for investment.
Zipcar team leaders who had other jobs could not fully dedicate themselves to helping the company to grow. Danielson had an engineering expertise that Zipcar needed, but she also worked full-time at Harvard (Ancona & Reavis 2014). Danielson had to work at Zipcar during the weekends and nights due to her full-time job. Mark, Chase’s elder brother, worked with another firm as well and had no time for Zipcar.
Chase thought people would do better under Chase’s leadership. She believed, for example, that Oakley could handle small details at her company. Oakley, who was previously a manager of a bar and restaurant, was not a car-sharing expert. Chase’s decision to hire him for Zipcar was a sign that she was unable to find the right team.
Zipcar also had gender issues in their hiring process. Chase claimed Oakley had hired Kefer Welch and other consultants who were unfit to run Zipcar. She claimed that Oakley had misled her into hiring Welch, because of Welch’s gender.
Since wireless technology was unavailable in early 2000s, it was impossible for the company to develop one. The technology was used to lock and unlock cars as well to connect Zipcar users to their servers. Chase advised them to delay the use of this technology because it was unreliable and had many negatives. Zipcar found it difficult to lease cars from car makers, since they didn’t understand their business models (Ancona, Reavis 2014). Zipcar was also reluctant to lease parking spaces from providers, as they thought that it would take up more space.
Zipcar also had a problem finding an insurance provider, as they were not familiar with car-sharing businesses. Chase was forced to use insurance providers who covered Zipcar’s competitors, Portland Car Sharing and Flexcar. Ancona & Reavis (2014) claim that this was a bad move by the company, as it had to pay high insurance premiums.
Zipcar had to come up with its own pricing model, and this forced Chase into copying the models in Canada and Europe. Her chosen model involved charging customers a fee for membership and a deposit to cover security. Also included were daily and hourly charges. Pricing for regular and premium hire services was also categorized.
When members couldn’t access the cars they booked, Zipcar received complaints from customers (Ancona & Reavis 2014). Members may be upset if they book regular cars and get premium cars, which are more expensive. Zipcar’s revenues have fallen due to these complaints.
Alternative SolutionsZipcar’s wireless technology to connect cars to users was complicated by the nascent stage of technology at the time. Alternative solutions include abandoning Zipcards and using a remote to start and open Zipcar cars. Members could be provided with such devices, along with instructions on how to report if the device is lost. It is important to deactivate the devices so that others cannot use them to unlock the cars. The device must have secret codes for unlocking and opening Zipcar cars.
Installing chip-readers would also have helped solve the technology problems Zipcar ran into during the launch of the car. The original plan was to install card-readers to detect Zipcards and open the car. In this instance, the reader is only to be used for starting the vehicle. In this case, the proposal is to install software that only starts the car.
Proposed solutionsThe experts working for Zipcar recommended that the company install readers in the cars so that Zipcards can be used to open and start the vehicles. These readers are hardware devices that can be modified for the software that will be adopted by the company in the near future (Ancona Reavis, 2014.) The readers were unable to recognize the unique Zipcard numbers, so the identification function had to be removed. The move was risky, since the members might lose their cards allowing non-users of Zipcar to use them.
RationaleThe proposal to find alternative solutions was based on the idea that Zipcar would have saved money by using remote controls. The devices also could be disabled easily if members report them as lost. The devices would have been safe for users as well as the firm. As an alternative, microchip-readers and card-readers would have been a good option. They could have used the automatic-machine concept that banks developed. These readers don’t require a sensor mechanism to detect the numbers, but instead require that the members feed in the numbers. These chips were secure because Zipcar members knew their passwords and could start the car even if they had lost their Zipcards.
