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Zipcar being a car-sharing company must first invest in vehicles, if they decide to enter into new potential markets such as Barcelona and London. Since Zipcar does not offer any such employee retention plans such as training and other fringe benefits, it leads to a lack of organizational commitment and high employee turnover that can subsequently reduce organizational productivity and increase recruitment costs decreasing the profit margin. Although this has not affected the loyal members, it hinders attracting new members and retention of members to avail Zipcar services. The main weakness of Zipcar is its increasing annual member fees and hourly and daily rates as many people do not see this hike in prices as justifiable when compared with other companies that provide car-sharing companies. These policies and geographical distribution of Zipcar helps to retain loyal members and attract new members despite the rise in the annual membership prices. The company provides flexibility to its members to use the company cars whenever required and to directly avail company services after becoming a member without the hassle of interacting with the Zipcar front office. This allows the members to save time as they can render services from the Zipcar nearest to their home or work area. This customer satisfaction is also a direct result of its disruptive business model due to which the Zipcar automobiles are accessible and available from different regions of the state. The main strength of Zipcar is undoubtedly its policies that tend to the customer satisfaction of its members. These conditions can affect the business as it directly or indirectly influences an individual’s purchasing power and spending patterns and habits. The rapid increase in prices can be a result of deteriorating economic conditions. However, this is not the only threat that Zipcar faces, the rise in petrol prices can help to attract new members but on the downside, it can also decrease the profitability as an increase in petrol prices will decrease the profit margin.
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The main threat that Zipcar faces is competition from other well-established companies such as Hertz and Avis that have already made a strong presence in the car rental industry. Many new segments have emerged in recent times which provides opportunities to expand into new segments and niches. The rise in fuel cost can also benefit Zipcar as this price hike can urge people to shift from purchasing personal vehicles to car-sharing modes which are relatively much cheaper. The rising population has presented itself as a great opportunity for Zipcar and other such car-sharing companies as this exponential growth gives these companies the potential to expand their services globally into growing markets such as China and India. Besides the uncertainty of profit, Zipcar’s poor management practices can also hinder its expansion and successful establishment of branches in new sectors. Zipcar also faces problems when entering into new markets as it must incur investments into vehicles that may or may not secure profitable payoffs. WeaknessesĪlthough the loyal members of Zipcar see no problem with the hike in Zipcar’s membership prices, other members may not perceive this increase as justifiable when compared to other companies providing the same services. This customer satisfaction has allowed Zipcar to retain its loyal members even after the hike in its annual membership prices. The company also tends to customer satisfaction as they give flexibility to the members to use the company’s car if required. This disruptive business model makes the company very user-friendly, boosting customer satisfaction that retains old members and attracts more potential members. This easy accessibility allows Zipcar members to avail themselves of those vehicles that are closer to their home or work area saving time. The greatest strength of Zipcar is its distribution and availability of its automobiles in different regions that make it easily accessible. with an estimated annual revenue of $278.9 million. In this article, we will see the Zipcar SWOT analysis and their competitors Zipcar SWOT Analysis Strengths The company has fared well since its establishment and is one of the top car-sharing services in the U.S.
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Since then the company has expanded and now provides automobile services to members around the urban areas and college campuses throughout the states of the United States, Canada, Costa Rica, Taiwan, Iceland, Turkey, and the United Kingdom. This car-sharing company was co-founded by Antje Danielson and Robin Chase in 2000 with the first Zipcar operating in June 2000 around Boston, Massachusetts. Zipcar is an American car-sharing company that is owned by Avis Budget Group that purchased Zipcar for an estimated $500 million on 14 th March 2013.