29-10-2013 Data Pagina Search Companies & Industries Global Economics Companies & Industries Politics & Policy Technology Markets & Finance Innovation & Design Lifestyle Sharing Hertz Car­Sharing Would Be Perfect, if Not for Those Meddling Customers By Justin Bachman October 29, 2013 Business Schools Small Business www.ecostampa.it 1/2 Foglio Video & Multimedia Most Popular Feed Read Shared Discussed Yes, People Are Losing Their Insurance Under Obamacare Plane Passengers Sleep Easier in 18­Inch Seats. Airlines Don't Really Care Chipotle: The One That Got Away From McDonald’s Goldman Sachs Tells its New Employees to Work Less How Fast­Food Eaters Split Along Ethnic Lines Yes, People Are Losing Their Insurance Under Obamacare Chipotle: The One That Got Away From McDonald’s As Spying Scandal Roils Capitals, Obama Holds Tight to His Trusty BlackBerry More Companies See Advantage to Manufacturing in the U.S. How Fast­Food Eaters Split Along Ethnic Lines Obama's Top Economic Adviser Tells Democrats They're Going to Have to Swallow Entitlement Cuts Yes, People Are Losing Their Insurance Under Obamacare Is This Apple's Worst Product? Photograph by Justin Sullivan/Getty Images The business of sharing a car has many laudable attributes: Drivers pay only for what they need, rental companies enjoy better use of their fleets, and everyone can feel happier leaving the planet a bit less polluted. The trouble, of course, is that the technology can do only so much to assure that a car is where it needs to be at the proper time, full of gas. The unknown person ahead of you with the shared wheels plays an important role in both the business model and your well­being. “The customer is part of your service­delivery mechanism,” says Mark Norman, president of ZipCar, the car­ sharing pioneer purchased by Avis Budget Group (CAR) for $500 million. Mark Zuckerberg Flexes Silicon Valley's Political Muscles on Immigration Ranking the States Where the Republicans May Be Most Vulnerable in in 2014 Companies Mentioned CAR (Avis Budget Group Inc) $29.01 USD ­0.39 ­1.34% HTZ (Hertz Global Holdings Inc) $23.08 USD ­0.65 ­2.82% Market data is delayed at least 15 minutes. Sponsored by That fact can sometimes wreak havoc on a car­share business, as Hertz Global Holdings (HTZ) has been learning with a slew of customer service complaints about Ads by Google its Hertz 24/7 operation. The company recently renamed the unit from Hertz On Demand, and before that it was called Hertz Connect. posting rants on Yelp (YELP), Twitter, and additional social media venues. Many complaints deal with Hertz’s alleged failure to make reserved vehicles available at their appointed times and places. Hertz has also been accused of changing the pickup to a location miles away, giving as little as 15 minutes’ warning when reservations are changed, and employing brusque or clueless telephone operators Industries Jobs Accounting jobs Advertising jobs Business Development jobs Consulting jobs Ritaglio stampa ad uso esclusivo del destinatario, non riproducibile. BUDGET Post a Job 087216 The names haven’t brought happier customers, however. The most irate have been Data 29-10-2013 Pagina Foglio 2/2 www.ecostampa.it Public Relations jobs unable to resolve problems. Executive jobs Hertz charges $10 for every 15 minutes a car is kept past its return deadline, but customers pay no penalty for returning vehicles to an alternate location, so long as it isn’t “unreasonably distant” from the pickup spot. The sharing technology has been equipped in Hertz cars in about 1,500 cities worldwide, with the largest U.S. market that of New York City. Abby Huntsman, an MSNBC television host and the daughter of former Republican presidential candidate Jon Huntsman, was among those incensed this summer when trying to use Hertz 24/7. Pharmaceutical jobs Legal jobs Marketing jobs Media jobs Non­profit jobs Sales jobs View all Industries jobs Am not one to complain about customer service, but @Hertz and their 24/7 on­demand is the worst I’ve ever experienced! #unreal — Abby Huntsman (@HuntsmanAbby) July 27, 2013 “It’s a new business, and like all new businesses, it has growing pains and we’re trying to learn as we go along,” Hertz spokesman Richard Broome says. The car­share business has proliferated in recent years among traditional car­rental companies, which have huge fleets that can sit unused at any given time. The ability to equip a car with GPS and other tracking software, park it in a densely populated urban neighborhood or college campus, and have it used nearly every day is a financial boon. The other advantage is the economies of scale a large player can bring to a fleet business such as cars—from car purchase costs to insurance discounts. “Synergy is an often­overused term, but one plus one is three or five” when properly merging a car­rental and a car­sharing model, Norman says. “It takes what are good unit economics [per car] and makes them very good unit economics.” The industry has also seen a fair bit of consolidation, with smaller players bought by behemoths such as Enterprise Holdings, the largest U.S. car­rental chain and owner of the National and Alamo brands. St. Louis­based Enterprise has been expanding its CarShare business for several years and now has sharing fleets in 15 cities, 75 university campuses, and 40 government and corporate locations. After it works out the kinks, Hertz hopes to see its 24/7 business expand into more suburban areas, serving as replacement for a second car. “We think it can really spread into the suburbs as people start to think, ‘Do I need to really own that second car?’” Broome says. ZipCar also sees opportunities outside urban centers and universities, especially among commuters who find that they use their car for less than an hour each day or who want to curb their fuel expense. Norman, a former chief executive officer of DaimlerChrysler’s (DAI:GR) Canada business, says ZipCar will look to suburban areas that are developing around a greater use of mass transit and where there is “24/7 activity.” Ritaglio stampa ad uso esclusivo del destinatario, non riproducibile. BUDGET 087216 Bachman is an associate editor for Businessweek.com.