- (Photo: Wikimedia Commons)
Late last week, Zipcar launched a LivingSocial deal in which District residents could sign up for a year's membership for a mere $29 — 75% off the standard price and with $30 in driving credit included. The deal ran for about two days, all said and done, and attracted a quite a bit of attention.
Well, the numbers are in — the deal grew Zipcar's D.C. membership by a whopping 3,745 people.
The deal was first unveiled early Thursday morning, and I couldn't take my eyes off it. I wrote about the company's LivingSocial deal shortly after it was announced, wondering initially whether Zipcar may have conjured up the deal as a way to collect new members in a car-sharing market that's about to get some competition. Zipcar lost most of the District's 84 curbside parking spaces recently, which for years it had enjoyed exclusively. Although Zipcar maintains that it won't experience a genuine reduction in spaces or rising prices, the company will know its first true competition in the area for the first time in nearly half a decade. DCist confirmed that this is not the case — that the LivingSocial deal had been scheduled for months and was happening in multiple locations — but I still can't ignore the implications of what such a LivingSocial deal means at this time.
The numbers told their own story as I watched the LivingSocial site.
By 10 a.m. Thursday, more than 900 people bought the $29 annual Zipcar membership. By 1:15 p.m., the number had risen to 1,803. Fast forward to 3:17 p.m. — 2,161 new people aspired to be Zipsters. The deal continued into Friday, and by 2:10 p.m. that day, 3,465 people opted for the Zipcar life. Once the deal expired 14 hours and 50 minutes later, we had our final number — 3,745 people.
3, 745. That's a lot of new D.C. Zipsters, people!
Consider the fact that Washington, D.C. previously sported what was said to be 55,000 Zipcar members. Zipcar built up its D.C. membership for a decade, working carefully and with assistance from individuals such as Gabe Klein, former DDOT director and Zipcar executive. Now, thanks solely to a LivingSocial deal, that number should be a little closer to 59,000 as we move into fall. These thousands of new members paid what would amount to, collectively, $108,605 for these memberships; without the discounted deal, Zipcar says the value offered would be $115, in which case those close-to-four thousand new members would have paid $430,675 for that value in joining Zipcar.
Hence the magic of LivingSocial — Zipcar just got a whole bunch of new people to buy their offerings, a fantastic leap in membership numbers, all the while losing $322,070 due to the heavy discount. That's a powerful, game-changing move in a market that's as boxed in as car-sharing.
Why? Because there's a limited number of customers who will join and give a damn about car-sharing. To be fair — that can be a high number, especially in our city. There are close to 200,000 households in the D.C. metro area without any personal cars, and many of these households may have a vested interest in car-sharing. A lot of people commute by Metro, by bike, on foot, and in other ways that don't rely on a car ... while still having the occasional desire for one. Those people are prime to join a car-sharing service, whether Zipcar or any of the new ones on the way.
The people who joined Zipcar thanks to the LivingSocial deal are what we'd call fencers ... people on the fence about when, why, and how they'll join a car-sharing service. Zipcar and LivingSocial present a deal, and boom, suddenly there's a reason to buy a service. These are, in many cases, the same people who might have been tempted by Zipcar's new (and still essentially unknown) competition. Over at Greater Greater Washington, Rob Pitingolo suggested recently that a new oligopolistic car-sharing market won't be fundamentally different than the one we have now. He alludes to how rates and features can be such great selling points, but also correctly says that once people choose a service, they stick with it. In other words, these new Zipsters, lured in by a great price, aren't likely to switch over to a competing car-sharing service.
Even if the deal was incidental to the bidding, Zipcar may have shown special insight in launching their deal when they did. The company now sports nearly 4,000 new customers that their competition may have, sooner or later, picked up if not for last week's LivingSocial deal.