Entrepreneur in Cooperative Clothing

A car rental company promotes the cooperative spirit in its search for profit.


Limited fees. Member interdependence. Serving unmet needs. 

The selling points of Zipcar, an 11-year-old car sharing and club service, seem to be taken straight from the credit union manifesto. The self-defined alternative to car rental and ownership has yet to make a profit, but when the company went public in April 2011, it “had a warm reception for its IPO,” according to this video from the New York Times.

Zipcar IPO

With its own insurance policy and gas card, Zipcar offers hourly and daily automobile rentals for carless city dwellers. Members (called “Zipsters”) can reserve cars in more than 60 cities across the country via computer or smartphone. For an annual fee and hourly rates, Zipcar provides mobility. In return, Zipsters follow four key rules of civility: return the car on time, keep your pets in their carriers, clean up after yourself, and leave the gas tank at least one-quarter full.

Zipcar has identified and served a need within cities across the United States. It provides accessible, affordable cars (fees are limited fees and the billing process is clear) and positions itself as a green, cooperative alternative to car rental companies. 

To be sure, Zipcar is a for-profit company, yet it is able to market itself differently because it identified, and made a community of, people with convenient, short-term car rental needs and then met the needs of that overlooked population. Instead of being customers, Zipsters are club members. The company relies on club members to follow the rules; its business model depends upon club members cooperating with one another and the system.

Zipcar capitalizes on the idea of a cooperative membership, but credit unions are the real deal when it comes to the cooperative advantage. What lessons can credit unions take away from Zipcar’s selling strategy? How can credit unions show members the power of a true cooperative?


May 12, 2011



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