What is the relevant learning from this business case in relation to managerial accounting

Concepts in Action How Zipcar Helps Reduce Twitter's Transportation Costs Soaring gas prices, high insurance costs, and hefty parking fees have forced many businesses to reexamine whether owning corpo- race cars is economical. In some cities, Zipcar has emerged as an attractive alternative. Zipcar provides an "on demand" option for urban individuals and businesses to rent a car by the week, the day, or even the hour. Zipcar members make a reservation by phone or Internet, go to the parking lot where the car is located (usually by walking or public transportation), use an electronic card or iPhone application that unlocks the car door via a wireless sensor, and then simply climb in and drive away. Rental fees begin around $7 per hour and $66 per day, and include gas, insurance, and some mileage (usually around 180 miles per day). Currently, business customers account for 1596 of Zipcar's revenues, but that number is expected to double in the coming years. Let's think about what Zipcar means for companies. Many small businesses own a company car or two for getting to meetings, making deliveries, and running errands. Similarly, many large companies own a fleet of cars to shuttle visiting executives and clients back and forth from appointments, business lunches, and the airport. Traditionally, owning these cars has involved very high fixed costs, including buying the asset (car), costs of the maintenance department, and insurance for multiple drivers. Unfortunately, businesses had no other options. Now, however, companies like Twitter can use Zipcar for on-demand mobility while reducing their transportation and overhead costs. Based in downtown San Francisco, Twitter managers use Zipcar's fleet of Mini Coopers and Toyota Priuses to meet venture capitalists and partners in Silicon Valley. "We would get in a Zipcar to drive down to San Jose to pitch investors or go across the city, " says Jack Dorsey, the micro-blogging service's co-founder. "Taxis are hard to find and unreliable here." Twitter also uses Zipcar when traveling far away from its headquarters, like when visiting advertisers in New York and technology vendors in Boston, forgoing the traditional black sedans and long taxi rides from the airport. From a business perspective, Zipcar allows companies to convert the fixed costs of owning a company car to variable costs. If business slows, or a car isn't required to visit a client, Zipcar customers are not saddled with the fixed costs of car ownership. Of course, if companies use Zipcar too frequently, they can end up paying more overall than they would have paid if they purchased and maintained the car themselves. Along with cutting corporate spending. car sharing services like Zipcar reduce congestion on the road and pro- more environmental sustainability Ileers report reducing their vehicle miles traveled by 445, and surveys show I'll emissions are being our by up in 5014 per user Reyand that, each shared car takes up mo 70 care off the road as mem- bers sell their cars or decide not to buy new ones-challenging the whole principle of owning a car. "The future of transportation will be a blend of things like Zipcar, public transportation, and private car ownership," says Bill Ford, Ford's executive chairman. But the automaker isn't worried. "Not only do I not fear that, but I think it's a great opportunity for us to participate in the changing nature of car ownership." Sources: Keegan, Paul. 2009. Zipcar -the best new idea in business. Formone, August 27. hipalmoney.can.com/2009/08/26ew/companies/zipcar_or_ mick Demand': Olsen, Elizabeth. 2009. Car sharing remove the company wheels. Now You Tunes, May 7. hip-www.mytimes.com/2049105/7/business businesspecuboy CARchonl; Zipcar, Inc. Zipcar for business case studus. hap:/www.zipcar.com basinew's incase scudies (accessed October 8, 2009)