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Zipcar - Financial Workings Updated

Zipcar's financial model shows: - In Year 1 with 12 cars and 220 members, the average margin per car was $12,080 and per member was $608.95, with a break-even of 15 cars. - In Year 2 with 36 cars and 648 members, the average margin per car was $11,127 and per member was $601.29, with a break-even of 19 cars. - The model also shows projections for expanding to 49 cars and 882 members in Year 3, and 58 cars and 1044 members in Year 4.

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Dipak Nandeshwar
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49 views5 pages

Zipcar - Financial Workings Updated

Zipcar's financial model shows: - In Year 1 with 12 cars and 220 members, the average margin per car was $12,080 and per member was $608.95, with a break-even of 15 cars. - In Year 2 with 36 cars and 648 members, the average margin per car was $11,127 and per member was $601.29, with a break-even of 19 cars. - The model also shows projections for expanding to 49 cars and 882 members in Year 3, and 58 cars and 1044 members in Year 4.

Uploaded by

Dipak Nandeshwar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Zipcar - financial workings:

Year 1 Year 2 Year 3 Year 4


Average number of members 220 648 882 1044
Average number of cars 12 36 49 58
Average members per car 18.33333318 18 18

Member
Member Lifecycle margin: Average Lifecycle Acquisition
admin: Life #
Margin (monthly)* Yearly Margin Cost ^
approximate
Planned Dec 1999 50.11 601.32 20 12,026.40 22.73
Planned May 2000 90.26 1083.12 6.67 7,224.41 22.73
Actual (Sep 2000) 30 360 3.91666661410 30.54393305

For margin (*), refer sheet titled "per member"


Average life of member (#) is based on attrition rate (5% for Dec 1999 & 15% for May 2000)
Member acquisition cost (^) is calculated as Marketing costs divided by number of new members
admin:
admin:
this is based on
this constant
the data in the
factor of 18
case that is
0.04%
calculated
penetration of9.6
as
hours available
the population
per day (40%
can be achieved
utilization)
in about 5 years.
Year 5 divided by 0.53
This is done only
1188 hours
for Bostonday
per (2.9
expected use per
million x 0.04%)
66 member (4 trips
18 x 4 hours, hence
16 hours per 30
days) - Refer
Net exhibits
Lifecycle
Margin
12,003.67
7,201.68
1379.456067
Zipcar - Per-car economics / calculations:

Dec-99 Year 1 Year 2 Year 3 Year 4 Year 5


Total car costs per year (Ref. Ex. 3) 7580 7580 7580 7580 7580
Revenues per car per year
(annual revenues / avg number of cars) 19660.66618707.36111
Margin per car per year 12080.66611127.36111
Total Fixed costs (annual overheads)
Corp+Boston 180975 214652
Break-even number of cars (Overheads/Margins) 14.98054719.29046769
Number of cars (rounded off) 15 19

May-00 Year 1 Year 2 Year 3 Year 4 Year 5


Total car costs per year (Ref. Ex. 5) 8680 8680 8680 8680 8680
Revenues per car per year
(annual revenues / avg number of cars) 29615.66628511.91667
Margin per car per year 20935.66619831.91667
Total Fixed costs (annual overheads)
Corp+Boston 180975 215532
Break-even number of cars (Overheads/Margins) 8.644339010.86793595
Number of cars (rounded off) 9 11
Zipcar - Per-member economics / calculations:

Dec-99
Revenus per member per year
annual fee 300
mileage 422.4
hourly 288
interest 12
Total revenues per member (annual) 1022.4
Year 1 Year 2 Year 3 Year 4 Year 5
Total vehicle costs (variable) - annual 90960 272880
Vehicle costs per member per year 413.45 421.11
Margin per member per year (Revenues - Costs) 608.95 601.29
Margin per member (monthly) 50.75 50.11
Total Fixed costs (annual overheads)
Corp+Boston 180975 214652
Break-even number of members (Overheads/Margins) 297.19410356.9864735
Number of members (rounded off) 297 357

May-00
Revenus per member per year
annual fee 75
mileage 422.4
hourly 1056
interest 12
Total revenues per member (annual) 1565.4
Year 1 Year 2 Year 3 Year 4 Year 5
Total vehicle costs (variable) - annual 104160 312480
Vehicle costs per member per year 473.45 482.22
Margin per member per year (Revenues - Costs) 1,091.95 1,083.18
Margin per member (monthly) 91.00 90.26
Total Fixed costs (annual overheads)
Corp+Boston 180975 215532
Break-even number of members (Overheads/Margins) 165.73630198.981187
Number of members (rounded off) 166 199

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