– Jason Voiovich, Director of Corporate Marketing, Logic PD
I don’t like renting cars.
I’m not sure I know many people who do. As a frequent business traveler, I’ve gotten better at running the gauntlet of terminal shuttles, slow lines, confusing kiosks, 5-point font paperwork, scratch and dent searches, smelly cars, and last-minute gas stations.
But I put up with it. I don’t have a choice in another city.
The thought of going this process as a normal part of my daily routine? I’d prefer another endoscopy. At least I’m (mostly) unconscious.
The daily, on-demand car rental experience is exactly the idea behind Zipcar. (Minus the flexible camera.)
Today, Zipcar and its share-car, micro-rental brethren (Hourcar, et al) are confined to a limited number of vehicles in primarily urban environments. Folks there don’t tend to own cars, and only need a car infrequently. As a group, these companies struggled to gain traction, expand, and make money.
The rental car giant’s recent acquisition of Zipcar is seen as something of a turning point in the micro-rental industry. Interbrand gushed that the move would help Avis expand from its traditional market (business travelers) into this emerging and untapped segment. Similarly, Wired Magazine thinks Avis will be able to help Zipcar get over the economies of scale issue that has plagued the micro-rental industry.
Frankly, that’s the wrong way to look at it.
Avis can’t run Zipcar like an extension of the Avis business. That’s not what’s holding it back. Put simply, it is too hard to rent a car. And it’s too hard because of the legal structure in place.
Zipcar is a classic “Crossing the Chasm” problem, trying to move beyond its initial market of tech-savvy hipsters (Zipsters) and into the broad market of everyday consumers who would give up a car entirely (or drop down to one car from two) if the process were markedly easier.
Instead of trying to simplify the existing car rental process, what about re-envisioning it? Think about how Redbox helped eviscerate Blockbuster Video’s core business. Blockbuser had complicated pricing based on different types of products. Redbox started with $1.00 a day for anything the kiosk rented. Blockbuster had late fees. Redbox just pinged your credit card for another dollar a day. Blockbuster had limited locations. Redbox is in almost every McDonalds. You had to return a movie to the Blockbuster it came from. Any Redbox will do.
Certainly, I understand a car isn’t a DVD, but why can’t we start there? Why can’t Zipcar use a dramatically simpler and cheaper cost structure? Why can’t Zipcar arrange a partnership with another firm with existing locations every few miles? Why does it need to be so hard?
Before you say it, I know why it’s hard. A car is three orders of magnitude more valuable than a DVD. Stealing a DVD doesn’t qualify as grand theft. You won’t risk prison time hitting someone with your DVD. Having a few beers watching your copy of the “Avengers” won’t earn you a DUI.
I get all that. However, in order to reach the broader market, Avis needs to figure out a way to reduce the legal barriers as much as possible. Instead of starting from the perspective of the car and working “down” to try to make it easier, Avis and Zipcar need to start from the perspective of something as simple as a DVD and work “up” – adding complexity only as necessary.
Will Avis lawyers see it that way? I’m not holding my breath. But I don’t see Zipcar taking off any other way.