Self-drive has been permitted in India since 1989, when an amendment to the Motor Vehicles Act permitted car rental companies to offer self-drive rentals. However, the business never really looked promising till three-four years earlier when drivers (for chauffeur-driven cars and taxis) earnings started multiplying and they became expensive.
The potential for self-drive/car-sharing services in India is huge and some studies say over the next four-five years, about 200,000 cars will be inducted into the self-drive part of the segment.
While some of the players initially started with an own fleet, which helped them build a network and customer base, almost all have moved to building the fleet through an asset-light model. All are making significant investments in technology and customer acquisition and so raising Angel/Seed/Venture/PE funds. Over a period of time, execution on the ground will be key to building the business.
Delivering the returns promised to the owner of the car over a three-year period and constant innovation to acquire and retain travellers/users as loyal customers will define market leadership.
(Rajiv Kr Vij, managing director and chief executive, Carzonrent, which owns and operates self-drive business, Myles)