Zipcar results show struggle for new members
The firm, which operates across the globe and has four operations in the UK in London, Oxford, Cambridge and Bristol, grew total membership by 21% year-on-year for the quarter ended June 20 to more than 730,000 members – below what it expected. Revenue increased by 15% to $70.8 million and pre-tax profits were $3.4 million.
Scott Griffith, chairman and chief executive officer, said: ‘We generated solid double digit revenue growth in the second quarter and grew total membership by 21% year on year. We also launched our Zipvan service into new markets and extended our geographic reach in both North America and Europe.
‘Despite these gains, we brought in fewer members than we had anticipated, and we faced economic challenges in our UK business. Moving forward, we are taking actions to maximise returns on our marketing spend, and we will be rolling out initiatives to accelerate adoption and expand our service offerings,’ he added.
Among the initiatives to reboot the firm, Zipcar announced a new membership scheme with lower upfront fees in a bid to encourage people to trial the service and will also launch an enhanced reservation system and mobile app.
It is also to evaluate new services such as peer-to-peer car sharing, one-way inter-city trips and a new referral programme.
In the UK, the weak economy has stymied sales, although Zipcar did launch 200 Zipvans into the country. It also introduced a salary sacrifice scheme in May in which employees can exchange a specified amount of their pre-tax salary each month for ‘Ziptime’ – blocks of driving time to make reservations. In total, around 1,500 vehicles are available at the four UK locations.