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Dude, Where’s My Zipcar? On Zipcar’s mobile phone app, places that have an available car nearby are shown with green dots on a GPS-enabled map.

The Zipcar app has already brought in new revenue by encouraging more frequent rentals and time extensions. “Initially, we were mostly focused on the app as improving the [Zipcar] experience,” Mottla says. But the app makes it so easy to rent a car or change the time window that people take advantage of the service more often than they did when they used a PC, which remains more conducive to planning rentals further in advance. In other words, it’s created a new avenue for consumption—part of the classic definition of a disruptive technology. Zipcar has only minuscule market share in the auto-rental business at large but holds more than 80 percent of the U.S. car-share market (and about 50 percent globally).

To test-drive the iPhone app, I joined Zipcar for a $60 annual fee and waited for the post office to deliver my “Zipcard,” which contains a wireless chip that authorizes the user to unlock a reserved car. (The real keys are always left inside for the next driver.) Days later, there I stood in front of a Dunkin’ Donuts, in need of some wheels. The app displayed a GPS-enabled map dotted with a handful of Zipcars that were within shorter walking distance than the two subway lines near me.

I chose a gray sedan that I saw was parked just a couple of blocks away. As I approached the car, though, I encountered a glitch. When I tried using my phone to honk the horn, the app failed and needed a couple of minutes to reload. But I unlocked the door successfully, and it felt futuristic to have rented a car without seeing or speaking to any customer service people.

Zipcar relies on hardware mounted on each car’s windshield—the so-called “black box,” which includes an RFID transponder and a wireless data link. Reservations are transmitted to the black box, so that the car knows who will be driving it and when. When you hold your Zipcard up to the windshield, it unlocks the car for the first time. Then you can use your iPhone to unlock it thereafter. When you’re finished with the car, you hold the Zipcard to the black box again, and it deauthorizes you.

Zipcar’s app “nails it on two fronts,” says Brad Spirrison, managing editor of the online app review community Appolicious. “It has this gee-whiz technology that allows you to honk the horn. Pretty Jetsons.” But more important, the Zipcar app naturally attends to the needs of mobile-phone users—“people who are on the go, have limited typing ability, and are probably searching for something.”

Zipcar says that new mobile features will keep coming. Emerging technology such as “near-field” communications will allow drivers to use a phone as a virtual debit card, Mottla says. That would eliminate the plastic Zipcard: drivers could use their phones to authorize the car and pay on the spot.

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Credits: Technology Review, Zipcar
Video by Lauren Cox, edited by Brittany Sauser

Tagged: Business, Business Impact, business, The Mobile Enterprise

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