JOIN USZooming along the subscription superhighway
When car rental platform Zoomcar’s co-founder Greg Moran began making trips to India from Pennsylvania almost a decade ago, in his earlier avatar as an investment banker, he was struck by the lack of self-drive car rentals in the country.
This was in early 2010, long before the advent of services such as Uber and Ola and the shared economy. With his business partner in tow, Greg felt that the self-driven car rental space has the potential to get good returns.
“My partner, David Back and I were looking at creating tech solutions to make the everyday commute easy and saw the immense potential in this space in India. We felt that the low car ownership rate in the country coupled with a growing young migrant population in the major cities meant there was scope for a self-driven car rental platform. We felt that that the model was better for the environment as well and more sustainable than regular taxi carrier services.”
The duo set up Zoomcar in Bengaluru in 2012 with just seven cars. “This was much before the Ola and Uber era. We were very new to this space. We did face some initial hiccups, related to licensing, but managed to get it up and running soon. We put in some seed funding and with some help from local partners launched Zoomcar in Bengaluru.”
What it did
Zoomcar allows customers to rent cars at a fee for a specified period. It meant that from planning a trip to a nearby vacation spot or a long drive, customers no longer had to depend on taxi companies.
It turned out to be a runaway hit and the company soon began to expand. Presently, the company operates in more than 50 cities across the country, has more than 10,000 cars. Over the years, Zoomcar has expanded and pivoted into the subscriptions model and even tried its hand at cycle rentals, apart from multiple other services.
It has raised more than $100 million from a bevy of top investors including Auto majors Mahindra & Mahindra, Ford Motors, venture capital firms such as Sequoia Capital, Nokia Growth Partners, FundersClub, BassetInvestment Group among others.
In April this year, Mahindra and Mahindra reportedly put in about $500 million. Talking about the journey, Moran points out, “In the self-rental space we command about 75% of the market share. In the shared subscription mobility market (Zap Subscribe), we are the lone lenders with more than 10,000 cars currently.”
How does the subscription model work?
ZAP Subscribe basically allows customers to subscribe to a car for a fixed period ranging from six months to 36 months. “We believe that people would want to rent cars for a limited time. We have partnered with many auto majors. Apart from paying a small amount every month as rent, they do not have to worry about securing loans or spending money on servicing, insurance and other related issues. “
He adds, “We are looking at doubling our numbers by the end of the year and hit the 15 million subscribers mark in the next few years.”
Tech for the future
As a company born out of a desire to offer quick tech solutions, Moran says ,“We have cadabra that shall turn our fleet into Internet of Things (IoT)-enabled vehicles soon. It tracks multiple data points on the car, including engine health, fuel levels, breaking patterns, acceleration points and so on. It will help make the driver more alert and reduce accidents.”