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The era of car ownership is coming to an end, according to the president of Zipcarand reimagining a hybrid transportation model will be the future

Published by Business Insider on Tue, 30 Mar 2021


<p><img src="https://static5.businessinsider.com/image/6063395e67187800184ad47f-1598/Tracey Zhen headshot 2021.jpg" border="0" alt="Tracey Zhen headshot 2021" data-mce-source="Courtesy of Zipcar"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Tracey Zhen believes that the notion of car ownership as part of the "American Dream" is coming to an end. In its place, she says, will be a future of multimodal transportation: Instead of relying solely on a personal car, people will&nbsp; look to a combination of biking, public transport, and car sharing to get around in the future.&nbsp;</p><p>As president of car-sharing company Zipcar, Zhen, 44, spearheads efforts to improve mobility for America's city dwellers. Zipcar serves over a million people in at least 500 cities and towns around the world. The company gives its users the option to choose between different rental schemes depending on the car model and rental duration, with prices in the US starting at $9 an hour and the option for monthly and annual memberships. Zipcar went public in 2011 before being <a href="https://www.wsj.com/articles/SB10001424127887324374004578217121433322386">acquired by Avis in 2013 for $500 million.&nbsp;</a></p><p>Zipcar is a 20-year veteran, and recently, it has experienced rapid changes to the transportation industry as people consider more options for public transit and alternative modes of transport to car ownership. The company has been taking steps to make its services more convenient for users who need to rent a car occasionally. In May, Zipcar <a href="https://markets.businessinsider.com/news/stocks/zipcar-introduces-instant-access-to-put-new-members-behind-the-wheel-within-minutes-1029197741">launched Instant Access</a>, which enables new members to access a car with a smartphone and drive within minutes of joining, providing on-demand flexibility for essential trips.&nbsp;</p><p>It's part of a greater vision for the company, Zhen says, of reimagining transportation while reducing the carbon footprint of the conventional car ownership model.&nbsp;</p><p>Insider spoke with Zhen about Zipcar's vision for clearer streets and a greener approach to transportation, and how that will play into the way city dwellers get around in the future.&nbsp;</p><p><em>This conversation has been edited for clarity.&nbsp;</em></p><h3><strong>You've had a lot of industry experience in consumer technology, but what brought you to Zipcar'</strong>&nbsp;</h3><p>I've been with Zipcar for a little over four years. And prior to that, I spent most of my career in consumer technology. What really excited me about Zipcar the most was the mission of the company to enable simple and responsible urban living. We're a membership-based model. We operate in over 500 cities and towns, so we're the earliest and the largest car-sharing network. And it's got this amazing business model that is not only profitable, but also doing a broader good for the cities where we operate. It's this nice intersection of technology and operations, and for me, it was the perfect opportunity.</p><h3><strong>I'm sure you've noticed a lot of changes since the onset of the pandemic to the transportation industry. How has car-sharing evolved since the pandemic started last year'</strong></h3><p>It's been a roller coaster. But what was really interesting for us was that when the pandemic hit, everything was on lockdown and we were busy focusing on rationalizing our cost structure for the drop in demand that we saw. But we really have recovered really fast because of a sudden shift in the use cases in which our members relied on us. We continued operations. Members used to take us for weekend trips. Now they were really using Zipcar for essential trips, whether going to the doctor, taking care of family members or just running day-to-day errands. So while we did have a rocky few months, we recovered fairly quickly.&nbsp;</p><h3><strong>Were there any key strategies that you relied on in order to adapt to the circumstances of the pandemic'&nbsp;</strong></h3><p>There is really no playbook for this kind of global health pandemic. So early on, as a leadership team, we did a bunch of scenario planningwe looked at every possible scenario of recovery, picked one in the middle, and made some tough calls. We rationalized the cost structure. We also had to refocus our strategic initiatives on the things that really mattered.&nbsp;</p><p>For example, one of the key initiatives that we focused on was launching our instant access product, which allows you to join Zipcar in a matter of minutes. We'll check your identity, we'll check a driver's license, and immediately you can go and drive. That was really critical during the pandemic because many people decided they didn't feel comfortable taking public transit or ride-hailing but wondered if Zipcar was convenient.&nbsp;</p><p>So we made that possible. We launched that in May, and in New York, for example, we saw a huge success. That was one of the examples where we really have stayed focused on what was important to our members, but also useful during this time.</p><h3><strong>A lot of people are also thinking about how they can minimize their carbon footprint and be more environmentally conscious. What are your thoughts on the impact of car sharing on congestion and on the environment'</strong></h3><p>We sort of invented car sharing; Zipcar has been around for 20 years, and the whole notion of how the company was formed was that our founders knew that the personal car sits idle 95% of the time. You drive it to work, you park it in, and it doesn't get used. So in this low utilization, we have this opportunity to find ways to provide access to transportation for people who sometimes need a car. We're not interested in replacing public transit. In fact, what's interesting is that our members really changed their behaviors after becoming members &nbsp;they drive less, they walk more, they use public transit more. We really see ourselves as an enabler of a car-free or car-light lifestyle.</p><p>In terms of how we see congestion, there's a bunch of studies being done. One of the most well-known was at UC Berkeley, where Dr. Susan Shaheen estimated the impact of car sharing. For us, with every car that we put on the grid, we take away the need for 13 personal cars. So you could do the math really quickly on the carbon impact that we have for each member: that reduces 1,600 pounds of carbon per year. But beyond social impact, Zipcar also provides a low-cost and effective way of accessing a vehicle. If you think about the cost of owning a car, there's the car itself, there's the maintenance, there's the insurance, there is the gas and all of that. And we provide a full all-in offer. And on average, our members save over $600 per month by not owning a car. So not only are we providing a social product, we're also offering a product that has real economic value for our members.</p><h3><strong>You mentioned that since the pandemic, you've been seeing changes in the ways that people are using cars. Do you think that that has in any way catalyzed new ways of thinking about how people are going to be using their cars in the future'</strong>&nbsp;</h3><p>Some of the broader, long-term trends that we've seen are that cities are getting more crowded. Maybe there's a slight blip with COVID and there's a little bit of an exodus, but cities will always attract people. But that being said, as cities become crowded, you have congestion, right'</p><p>Have you tried driving pre-pandemic in the middle of New York' It just doesn't work. So we really see that owning a car is not the answer. And consumer habits are also changing. I mean, today, instead of ownership, you can pay for access. No one really goes to buy videos anymore. There's Rent the Runway, there are options to pay for access to music, what have you. Car ownership is really another service that is really about paying for access. And I think that the American philosophy of owning your own car is going to evolve, especially with younger generations.</p><h3><strong>And what do you think is the role of the city itself in encouraging new ways of thinking about transport'</strong></h3><p>Any city wants to be able to move people so that they can get to work. They want equitable, affordable access, done in a way that's efficient. Public transit is key. So I think that as cities think more about multi-modality and how they can grow beyond the public transit network, we really see ourselves playing a role in that as part of the broader public transit network.</p><p>And I think the pandemic is also another reminder of how nice it is to see emptier streets in terms of curb space and how you think of land use. Would you rather have restaurants that are opening up outdoor dining, or would you rather have a ton of cars parked 95% of the time being unused' As we think more about being more proactive around managing space, managing congestion and transport options, I think they all kind of come together.</p><p><a href="https://www.businessinsider.com/president-of-zipcar-transportation-hybrid-car-sharing-2021-3#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-symphony-seas-worlds-largest-cruise-ship-deals-with-waste-2020-3">How waste is dealt with on the world's largest cruise ship</a></p>
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