Rajiv K Vij, managing director and chief executive officer of Carzonrent, wants you to break your bond with your car. His growing fleet shows he has achieved partial success. Myles, the self-drive car rental service offered by Vij, has seen its fleet multiply from 14 to 1,200 cars in a year from launch.
"People are now questioning whether they need a second car in the family. We find more people willing to use a car on a self-drive basis, either for a few hours or days, for local use or outstation travel for business or leisure," says Vij.
Weekends bring high demand for these cars even though the average fleet utilisation is about 60 per cent. "We had to refuse some bookings during long weekends in September-October. People are making full payment for cars they wish to drive in December and January," claims Vij, adding that his business is growing at 30 per cent month on month. The age of Myles users ranges from 21 to 55 years.
Mobility solutions such as self-drive car rentals are gaining ground in the Indian market. Myles has a presence in 21 Indian cities and offers 34 models on rent. These range from a Tata Nano/Mahindra Reva to a Mercedes E Class. You need to shell out Rs 456 an hour to drive an E Class and just Rs 37 an hour for a Nano. Myles is trying to create a network where you can have these vehicles at a walking distance from where you are.
Vij says that self-drive car rental is a great platform for car makers to showcase their upcoming models to prospective customers. "Car models yet to be introduced are offered by us for a test run to select customers. They can then decide if they want to own them upon launch."
The prospects of this segment have attracted other players as well. In August, Vikas Parasrampuria launched a self-drive car rental business, Voler, after catering to corporate clients for five years.
"We have a fleet of 50 cars catering to Delhi NCR. We plan to add 300-400 cars this year and expand to 5,000 cars to cover 20 cities in the next four years," says Parasrampuria. Voler has also seen full booking on long weekends.
Parasrampuria says it makes sense to go for rental instead of owning a car. "If you hire a Maruti Swift from us for five days of a week, you pay Rs 3,500. The monthly cost comes to Rs 14,000. You do not pay for maintenance and insurance of the car. You do not need to hire the car if you are not going to office. When your car breaks down, you get a replacement within two hours. All our cars will are brand new. On the other hand, if you wish to own the same car, you pay an EMI of Rs 14,000-15,000 for five years."
"The consumer today is highly price sensitive. This segment is growing. In China, where the segment started seven years ago, the size of the self-drive car rental industry has grown to about 300,000 cars," says Karan Jain, co-founder of Revv, a self-drive car rental launched in July with 100 cars in Delhi NCR. It plans to grow to 200 cars in the next two months and to 2,000 cars by next year.
The self-drive car rental industry has a fleet of 2 million cars in the US. In China, the largest player, China Auto Rental, has a fleet of 100,000 cars and commands a market cap of $3 billion on the Hong Kong Stock Exchange.
The Indian market is nascent, with a few thousand vehicles, but has potential due to its large population and weak public transport system.
"Using a car as a part of a car sharing scheme can be a great opportunity for customers to become familiar with different brands and vehicles," says the Cars Online 2015 report by Capgemini. Nick Gill, global head of the automotive practice at Capgemini, says people in developing markets are more willing to try mobility services.
