One-Way Car Rentals - A Growing Trend Among Indian Road Trippers

In recent years, India has witnessed a transformation in the transportation landscape, driven by advancements in infrastructure and shifting consumer preferences. Road transportation, in particular, has evolved significantly, becoming one of the country's most rapidly developing sectors. 

This evolution is fueled by the rise of on-demand cab aggregators and commuting services that offer convenient and cost-effective transport options tailored to individual needs. While traditional taxis have long been a staple in India, the internet and technological advancements have ushered in a new era of travel convenience.

Amidst these changes, a new trend is emerging: one-way car rentals. These services cater to travellers seeking hassle-free intercity commutes without the burden of paying for round trips. As more companies expand their networks across multiple cities, the demand for one-way rentals is rising, offering a fresh perspective on road travel in India. This article explores the growing trend of one-way car rentals, examining how companies are adapting to meet the needs of modern travellers and the impact of this trend on the industry as a whole.

Expansion of Networks by Car Rental Companies

Car rental companies in India are rapidly expanding their networks across multiple cities to meet the growing demand for one-way rentals. This expansion is driven by the increasing popularity of flexible travel options, as more travellers seek convenient and cost-effective ways to move between cities. To cater to this demand, companies are strategically setting up operations in key urban centres and smaller towns, enabling seamless travel across diverse regions.

Mr. Gaurav Aggaral, Founder and CEO at Savaari Car Rentals says “By collaborating with local service providers, rental companies offer a wider range of pick-up and drop-off locations, making it easier for customers to access vehicles. This network expansion also involves investing in technology-driven solutions, such as mobile apps and user-friendly online platforms, that allow customers to easily book and manage their rentals”.

“Furthermore, companies are diversifying their fleet to include various vehicle types, catering to different travel preferences and needs. Whether it's compact cars for solo travellers or larger vehicles for families, rental companies are ensuring that they have the right options available to suit their customers' requirements. Popular routes for one-way rentals include Mumbai to Pune, Bangalore to Mysore, and Bangalore to Chennai. These routes are particularly well-suited for road travel due to the convenience and cost-effectiveness they offer. By choosing one-way rentals on these routes, travellers can avoid the hassle of returning the vehicle to the original location and instead enjoy a more flexible and tailored travel experience” Gaurav added.

Strategies to Attract Customers to One-Way Rental Services

Unlike round trips, one-way cabs should ideally cost 50% less, but this is often not the case. To address this gap between overpriced one-way rentals and the need for safe transport, several cab companies have launched affordable and convenient one-way car rental services. Companies like Savaari Car Rentals showcase the MaaS (Mobility-as-a-Service) model's potential by offering diverse mobility solutions such as local cabs, round-trip outstation services, airport pickups, and one-way trips tailored to specific customer needs. They elevate the transportation experience with value-added services, turning routine journeys into personalised and comfortable experiences.

“One of the key strategies employed by companies is the use of advanced pricing technology. By leveraging dynamic pricing algorithms, rental companies can offer competitive rates that adjust based on demand, distance, and availability. This ensures that customers receive the best possible price for their journey, making one-way rentals a more attractive option. Additionally, transparent pricing models eliminate hidden fees and unexpected charges, building trust and satisfaction among customers” remarks Mr. Anand Dorairaj, Head of Marketing and Growth at Savaari Car Rentals. 

He adds “Creating value packages is another effective strategy. These packages can include benefits such as unlimited mileage, free cancellations, and additional driver options. By bundling these services, companies provide added value that enhances the customer experience and meets diverse travel needs. To further attract customers, companies are investing in user-friendly technology. Mobile apps and online platforms enable customers to easily book and manage their rentals, offering features like real-time vehicle availability, instant booking confirmations, and customer support. These technological advancements streamline the rental process, making it more convenient and accessible”.

Enabling Exploration of Offbeat Destinations

Unlike planes that shuttle you from one airport to another or trains that take you from one station to the next, car rentals offer the freedom to explore numerous detours along the way. This flexibility allows travellers to discover and enjoy a multitude of offbeat destinations that would otherwise remain hidden.

Car rental services have dramatically improved access to tourist destinations, particularly remote or lesser-known locations. These services offer customised travel experiences that appeal to a diverse range of travellers, from solo adventurers and families to business tourists. To meet the varied needs of these travellers, rental companies provide multilingual drivers who break down language barriers and offer insights into local culture and hidden gems. By promoting road trips to off-the-beaten-path destinations, car rentals drive tourism, encouraging travellers to spend on accommodations, dining, souvenirs, and unique local experiences.

Mr. Gaurav Aggaral, Founder and CEO at Savaari Car Rentals says “Companies like Savaari advocate for road trips as an ideal way to discover India, promoting lesser-known sites such as Osiyan in Rajasthan, Chaukori and Nag Tibba in Uttarakhand, and the tribal regions of Odisha and Chhattisgarh. By encouraging exploration beyond the usual tourist hotspots, car rental services not only enrich the travel experience but also support local economies and preserve cultural heritage”.

Overcoming Logistical Challenges

Car rental companies face logistical challenges like managing fleet availability and vehicle returns across different locations. To overcome these hurdles, they leverage technology and strategic partnerships, enhancing the customer experience. Services offer online booking, GPS tracking, and 24/7 customer support, ensuring a seamless experience for users. Companies provide on-time guarantees, trusted drivers, and a fleet of clean, hygienic, and well-maintained cabs. By integrating high-end technology and prioritising exceptional customer service, new-age one-way cab providers in India are becoming the preferred transportation mode for diverse audiences.

Contribution to the Growth of the Car Rental Industry

“The one-way rental trend significantly contributes to the car rental industry's growth in India. The projected annual growth rate of the car rental market (CAGR 2024-2029) is 6.80%, with a projected market volume of USD 4.39 billion by 2029. The number of users in the car rentals market is expected to reach 119.80 million by 2029. For companies like Savaari, 55% of their business comes from one-way car rentals in India. As the only car rental service offering one-way fares at one-way prices, Savaari's rates are the most affordable in the industry, inclusive of state and toll taxes. This highlights the growing preference for flexible travel options and contributes to the overall industry growth” describes Mr. Gaurav Aggaral, Founder and CEO at Savaari Car Rentals

Shifting Customer Preferences Towards Flexibility and Customization

Travellers are now increasingly seeking personalised experiences that cater to their specific needs and preferences, moving away from the traditional, one-size-fits-all approach. This trend is driving car rental companies to innovate and adapt their services to meet these evolving demands. 

“In the last five years, the car rental industry has seen a 25% increase in demand for personalised travel options. The user penetration rate in the car rental market is projected to be 5.6% in 2024 and 8.0% by 2029. This shift can be attributed to several factors, including the rise of technology, increased demand for customization, changing travel preferences, and economic factors” mentions Mr. Anand Dorairaj, Head of Marketing and Growth at Savaari Car Rentals.

Anand adds “With access to online platforms and mobile apps, travellers can easily compare prices, read reviews, and book services that best match their needs. This accessibility has led to a growing expectation for transparency and convenience, with customers favouring rental companies that offer clear pricing, customizable itineraries, and a seamless booking experience.”

To cater to this demand, car rental companies are offering flexible rental terms, allowing customers to choose pick-up and drop-off locations, vehicle types, and rental durations that suit their travel plans. This flexibility extends to one-way rentals, which enable travellers to plan spontaneous trips without the obligation of returning the vehicle to the original location. 

Additionally, companies are integrating features such as GPS navigation, Wi-Fi connectivity, and multi-lingual support to enhance the travel experience. To attract and retain customers, companies are investing in customer service, fleet diversity, and innovative technologies. This competitive environment is driving improvements in service quality and fostering innovation, ultimately benefiting consumers.