Profiting In The Shadow

What’s it like living in the shadow of a war between dominant Uber and Ola? For the self-driven, the rental car segment was almost non-existent five years ago, and the spurt in new luxury travel choices has been a big boost. Even as the two taxi aggregators Uber and Ola fight it out and are burning cash to obliterate the other, the smaller app-based rentals have pushed on to profitability with clever strategy and diversified portfolios.

Rajiv K. Vij, CEO of Carzonrent, says, “Given the amount of money they raise, it is nearly impossible for us to compete with them in the cab-on-the-go segment but there is a lot of space in the other segments for players like us to grow.”

With a wide range of portfolios ranging from government authorised Radio Taxi Service (EasyCabs), Myles (Self-Drive/Car Sharing) to Corporate Car Rental, Carzonrent has grown at a rate of 25 to 30 per cent in the past three years. Vij says that his company has been able to generate healthy profits in this period.

Just like Carzonrent, there has been an influx of rent-a-car service providers in the country in recent years to tap the massive $8-9 billion cab rental industry of the country of which only 8 to 10 per cent is organised.

Paris-based BlaBlaCar, which has been in India since January last year, is expecting a ten-fold growth in the number of rides on its platform in the next 5-10 years. The firm, which offers ride-sharing for long-distance travel, has already seen one million seats being offered through its platform in the country.

Nicolas Brusson, co-founder and COO of BlaBlaCar, says, “Ride-sharing is definitely gaining traction the world over including India. However, for longer distance travel, this somehow has not been the case. But it is changing.” BlaBlaCar connects drivers and riders heading to a city and allows riders to pay drivers enough to cover reasonable expenses. BlaBlaCar makes money by collecting a transaction fee (say 10 per cent) of the total cost of a ride. Two other successful app-based car rentals operating in the country that are planning expansion are Zoomcar and Revv. Zoomcar, which offers cars on an hourly, daily or monthly basis, was started in Bengaluru with seven cars and has expanded to the Delhi NCR, Mumbai, Chennai, Hyderabad, Pune and Chandigarh. It has 2,000 cars and sees 1,200 rides each day. Greg Moran, co-founder and chief executive officer of Zoomcar, says that the company has been able to make a profit in every city within a few months of launch and is planning to increase its fleet to 50,000 cars in two years and expand to 30 cities.

Revv, another 100 per cent self-drive rental has become quite popular among people who want to rent luxurious cars and big SUVS. The company, less than a year old, currently operates in Delhi NCR, Hyderabad and Bengaluru and its portfolio of cars includes approximately 150 cars with 60 per cent SUVs, 10 per cent ultra-luxury, 30 per cent sedans and hatchbacks.