As mobility struggles, Savaari takes the one-way route

Back in 2006, sitting in the US, Aggarwal was trying to pre-book a car on rent to go from New Delhi to Roorkee (A city in Uttarakhand), and was surprised to see the non-availability of a car rental service that he could trust in terms of quality as well as rates. This impelled him to start Savaari Car Rentals, a chauffeur-driven car rental company, present across 2,000 cities in the country. Aggarwal moved back to India in 2011 and has been working full time in the company.

The company that has been operational for the last 14 years, provides a range of services from one-way drops, inter-city cabs to airport transfers and local hourly rentals.

The company lately has been seeing a lot of traction for one-way inter-city drops and has expanded its one-way services from 500 to over 5 lakh routes.

In conversation with DH, Gaurav Aggarwal, Founder & CEO, Savaari Car Rentals said the company is seeing a manifold increase in one-way inter-city drop numbers as compared to what they were doing in the pre-Covid period.

“When the lockdown was gradually being lifted, we noticed there was a lot of need for folks for emergency travel. Even though one-way was one of the services that we offered, it wasn’t getting much attention pre-Covid and round trips were a big part of our entire business. But we started seeing growth in one-way trips from May, and focussed sharply on it,” says Aggarwal.

“Metros contribute to 60% of the demand, but people are going to every nook and corner of India. For instance, we have had people travel from Chennai all the way to Kolkata.”

The company’s one-way services have witnessed a growth of 800% from unlock 1.0 in June and it foresees a demand uptick of 300% during this season.

Price optimisation

Talking about the core challenge of a one-way car rental business, Aggarwal says. “In one-ways, a person goes from A to B city and ideally, you are supposed to charge for that A to B, so it should be around 50% of what the round trip will cost, but if that were to happen, you’ll have to ensure that you find another customer for the same car that comes back from B to A.”

“Our prices change automatically when there’s another customer who can use the same car to get back from B to A. This is helping us give our customers a very low price, 50-60% of a round trip.”

Currently, Savaari is doing around 1,500-2,000 bookings a day and the ticket size of the company is around Rs 7,000 on an average.

Savaari raised its Series A round from Inventus Capital Partners in March 2012, and Series B round led by Intel Capital in September 2013. The total capital raised by the company amounts to Rs 33 crore.

“In October, we have recovered close to 60% of our pre-Covid numbers, and in November we are anticipating 75% recovery,” says Aggarwal.

Credible alternate

On the way forward, Aggarwal says, one-way car rentals have a bigger role to play, where it can become a credible alternate to any train traveller.

“Anyone travelling through AC train is a potential customer whom we can offer a much better, safer option to travel. With the optimisations that we have done, the price one pays would be similar or even lower than what they pay for train. This is specifically for the segment where the travel time is less than six hours or eight hours.”