Self-drive rental start-up Zoomcar awaits next round of odd-even

Sequoia Capital-funded self-drive rental car agency Zoomcar has been trying to make inroads into the Indian market and is making firm moves so that it can come out on top.

Recently, Bengaluru-based Zoomcar launched its much awaited doorstep delivery and pickup service, which Greg Moran, co-founder and chief executive officer, said, was an attempt to get users comfortable with using rented cars. The ultimate aim was to reach a pick up and drive parking lot system similar to ZipCar in the US.

“The company plans to reach 20 cities this year, with special attention to Tier-II cities,” said Moran. He said Zoomcar was currently focusing on improving customer experience and will be launching a new app soon. The company is looking at full automation and customers can enter a car through an app, without a key.

Last year, the company had launched an advertising campaign with a heavy social media presence to encourage users to take vacations in rented cars. But, it lacks the flexibility of the rental car agency services it is trying to mirror. The concept, which originates in the US, is about a customer's ability to pick up a vehicle at a parking lot in a city of his choice, pay for it on a per-hour or per-day basis. The concept allows the customer to deposit the car at another parking lot in another city, if needed.

In case of Zoomcar, users must park the cars back at the parking lot where they picked it up from or suffer a penalty.

“The bigger players in the US can afford the flexibility because of scale. They have 500,000 to one million cars and can afford to do it,” said Moran. Zoomcar, he said, was much smaller and had to stick to some restrictions. “We have, on some routes, allowed customers to park at other locations but it isn’t done extensively,” Moran added.

The company’s biggest market currently is Bengaluru, its home base, with Delhi and Mumbai following. The average transaction size for the company is Rs 4,000-5,000, which Moran admits is on the higher end compared to other direct competitors. Zoomcar is almost always sold out on most days, with trip times rising to two days over the weekend. “The demand is seasonal and all I'll say is that the refusal is almost 10 times larger than the orders booked,” explained Moran.

The next big milestone for Zoomcar, however, is to add 5,000 cars in the next six months and increasing adoption in Delhi. “If the odd-even rule is introduced, it will help our usage and we are doing activities as well as running digital campaigns to increase awareness,” he said.

The company has raised over $22 million in the past three years, most notably from former Infosys veteran Mohandas Pai. The company had been in the limelight in June when the Leh taxi drivers association attacked Zoomcar branded vehicles for “taking away business”. Zoomcar and the association then managed to settle their differences. Just before this incident, the company’s founder David Back had quit the company and had returned to the US. Sources said Back still held equity in the rental driving start-up.