A Self-Service Rental Car

Web 2.0 businesses -- online ventures like MySpace and YouTube whose customers upload the goods rather than buying retail products -- can teach businesses that operate in the physical world a few tricks about customer satisfaction. Zipcar, the urban car-sharing company that now operates in eight U.S. cities, has brought a Webby mindset -- automation, transparency, community -- to the rubber-meets-road business of car rental. The company's customer-pleasing methods could work for plenty of brick-and-mortar operations.

For starters, Zipcar removes human operators from the rental process entirely. Customers sign up online, then reserve cars either through Zipcar's Web site or by calling an automated phone system that recognizes their cell-phone caller ID, so they don't need to sign in with a string of numbers.


  The cars are parked in local lots and garages, unattended. Each car has a card reader mounted behind its windshield. If a customer has a reservation for that car during that time slot, the vehicle unlocks when she waves her "Zipcard" at it. The keys are inside.

A female software executive I interviewed told me that after years of being delayed, argued with, and even harassed by rental agency staffers, she enjoys the feeling of walking onto the lot, unlocking the car as if it were hers, and driving away.

The trick to automation is to make it feel like autonomy. Zipcar puts you not only in the driver's seat but also behind the reservations desk. Most rental companies' online systems work like slot machines -- you punch in a time and a car preference, then push the button and hope you win. If not, you try again.

Zipcar's site is built around a core Web value -- transparency. Customers see a grid of all available cars in their area. A color-coded time chart shows when each is available or reserved.


  Instead of blindly asking the system for a certain kind of car on a certain day, the customer can view the entire inventory and adjust plans to match availability. If the nearest Mini convertible is booked until 3 p.m., the customer might postpone plans by an hour to get it -- or decide the Mazda with a sunroof on another lot will do.

Zipcar has telephone operators standing by, but their job is to handle exceptions. As with YouTube and MySpace, the reservation system mostly runs itself.

But the most surprising Web 2.0 value Zipcar brings to car renters is a sense of ownership and participation in the company's operation. If you're a member, it's clear that you and your fellow Zippers, even if you never meet them, get to drive sharp new cars at affordable rates only if you all do your part.

That means keeping the cars clean, returning them to the lots on time, taking them to the gas station and car wash when necessary (the company pays), and convincing other people to sign up.

One member told me it felt more like self-empowerment than self-service. Washing your rental car for free if you feel like it differs from having to bus your own table at a fast-foot joint. "When I rent, it feels like I'm driving some big company's car," he explained. "But the Zipcar feels like mine."


  A lot of companies could adapt the same Web-based principles -- automation, transparency, and community -- both online and off: Figure out what customers would rather do themselves, and don't stick them with grunt work (like changing the oil) to cut costs. Use the Web and phone to automate transactions, and make the information customers want transparent so they feel like they've been put in charge, not on hold.

And instead of hiring an army of entry-level staff to mind the store, take a cue from the new breed of successful Web sites: Let your customers mind the store for themselves.

Before it's here, it's on the Bloomberg Terminal.