In an effort to tackle the issues facing the car rental industry, Droom has launched its new product, Droom Rental. The company, which is celebrating its tenth anniversary, announced the addition of a new category that employs technology and artificial intelligence to provide over 25,000 cars in over nine categories, including cars, buses, coaches, helicopters, planes, yachts, ambulances, scooters, bikes, and bicycles. In just one week since its introduction, Droom Rentals has reportedly acquired more than 1,500 listings from more than 100 rental providers in more than 25 cities.
Car Rentals a Highly Unorganised Sector in India
According to a statement from the firm, the $23 billion car rental market in India is currently very disorganised, with a significant lack of trust, opaque pricing, and non-standard experience, as well as a limited adoption of AI and technology. Other rental categories like daily rental, corporate rental, wedding rental, employee transportation solution, event rental, etc., remain largely unorganised, inefficient, and full of fragmented providers, despite the ride-hailing segment’s successful integration of cutting-edge technology and streamlined operations, Droom stated and expressed its intention to tap into the unorganised rental market.
According to Sandeep Aggarwal, the founder and CEO of Droom, the car rental industry has long been a source of frustration for him because it lacks transparency, trust, standardisation, a vast or diverse fleet, or premium fleet options. He said that the company will shortly be introducing a state-of-the-art technological stack for employee mobility, corporate rental, and all other rental kinds, bringing India’s car rental market up to, if not better than, international standards.
Connecting Used Car Dealers with Customers
Sandeep Aggarwal founded Droom in 2014, and it provides an online marketplace that links buyers and used car dealers. Through its partnerships with banks and NBFCs, the startup also offers financial backing. To date, the firm has raised a total of $296.00 million. Spinny: A Gurgaon-based marketplace for trading used cars, Spinny was founded in 2015. It lets people buy cars, schedule test drives, and choose cars online. Droom’s rivals are Spinny, Cars24, and CarDekho.
The startup’s main sources of revenue include advertising fees, vendor subscription revenues, and buyer commissions. In terms of finances, Droom’s India division cut its loss in half for the fiscal year that concluded on March 31, 2023. From INR 137 Cr in the previous fiscal year to INR 62.1 Cr in FY23, the company was able to reduce its net loss by 55%. But throughout the reviewed year, its operating revenue also fell. In FY23, Droom recorded operating revenue of INR 253.2 Cr, a 34% decrease from INR 384.6 Cr in FY18.
After suffering losses due to the pandemic, the Indian vehicle rental business is again pushing forward with innovative ideas. Research and Markets predicts that the sector will reach a $2.03 billion valuation by 2026, with a compound annual growth rate (CAGR) of 9.38%. Nevertheless, there are a number of obstacles and possibilities it must overcome, such as the incorporation of new technologies, shifting consumer tastes, and environmental concerns.
Because of changes in consumer tastes and technological advancements, road travel in India is experiencing a dramatic upheaval. As more and more people travel, they are looking for activities that are unique to them and tailored to their interests. More and more people are interested in ecotourism and other forms of experiencing tourism, which has increased the variety and excitement of road trips.
In 2012, an American partnership consisting of Greg Morgan and David Back, who had previously studied together, travelled to India with the intention of launching a business. After conducting extensive research, they ultimately decided to focus on Zoomcar. Both of them were of the opinion that the transportation industry in India required a shakeup since they were aware of the fact that the country’s infrastructural and economic conditions were affecting the ownership of automobiles. However, at the same time, there was a strong sentiment among the general population to own an automobile.
This led to the establishment of Zoomcar, which eventually became the first mobility platform in India that was capable of autonomous driving. This concept strikes a chord with young people in India, who can now hire a car without having to go through the burden of making a down payment, getting insurance, or going through the documentation procedure.
“Access rather than ownership was more appealing to the younger population,” says Greg Moran, who is one of the cofounders of the company.
Car Rental Bookings by Brand in India as of December 2023
Self-Drive vs. Car Rental
Car rental and self-drive businesses each have their own set of advantages and disadvantages that are specific to them. On the other hand, when it comes to profitability, firms that rent cars typically have a bigger profit margin than companies that allow customers to drive themselves.
As a result of having a larger fleet of vehicles, car rental firms are able to serve a greater number of customers. Additionally, car rental firms have contracts with hotels, airlines, and travel agencies, which results in a consistent flow of consumers for the companies.
On the other side, organisations that offer self-drive services have a smaller fleet of vehicles, which restricts the number of customers they can serve. Companies that offer self-driving services also face competition from ride-sharing services such as Uber and Lyft, which have caused a disruption in the traditional market for transportation services.
Taking a Maharaja Ride
Renting a car is a great way to test out a variety of vehicles, especially with rising incomes and more people taking trips abroad. The leasing of high-end automobiles is one of the most dynamic areas of India’s transportation market. Both the purchase and rental of high-end automobiles are experiencing strong growth in India. The younger generation is eager to try out every single vehicle that’s been released. More people are paying attention to the car industry now than in the past.
The rising number of domestic and international tourists, as well as the country’s fast urbanisation, are fueling the luxury car rental industry’s expansion. Luxury car rentals are seeing an increase in customer base.
The luxury car rental sector in India is booming, and the reason for it is the country’s biggest demographic group, the millennials. The typical Indian citizen is just 30 years old, making this a very youthful nation. Because owning a car is so expensive, many young individuals would rather rent one for short trips or business meetings than buy one. Aside from their penchant for opulent transportation, additional factors fueling the expansion of this market include the desire to show off one’s social standing and try out every kind of high-end automobile on the market.
Annual revenue for these businesses can range from INR 50 lakhs to more than 5 crores in big cities like Bangalore, Delhi, and Mumbai due to demand from weddings, corporate events, and tourists. Strategies for pricing, the size of the fleet, and the efficacy of marketing and customer service all contribute to revenue. One way that some businesses increase their revenue is by offering chauffeur-driven services.
Factors including brand reputation, client happiness, and flexibility to market developments are highlighted by the competitive nature of India’s luxury car rental sector. The revenue of different companies can differ greatly.
In addition, wedding and holiday seasons are typically the busiest for revenue. A lot of companies go into agreements with hotels, event planners, and travel agents so they can reach more people. Rentals have also been made easier with the rise of online booking platforms and mobile apps, although operational expenses like maintenance, insurance, and staffing can cut into profits. Advertising effectively, providing excellent service, and keeping a varied and well-maintained fleet of luxury automobiles are the three most important factors in determining the success of luxury car rental firms in India.
In sum, the car rental business plans to investigate uncharted territory in India. This sector is poised for explosive growth with the introduction of electric and hydro-powered vehicles. While there are now certain challenges, such as inconsistent interstate taxes and toll rates, consumer safety concerns, and accommodations for driver-partners, these can all be addressed in the future, thanks to the constantly improving technology in India.
Zoomcar is the first self-drive car rental firm in India. ZoomCar operates on a strategy in which it borrows money from banks to acquire 75% of the cars in its network, with the other 25% leased from major firms like Avis Budget Group.
Zoomcar was founded by Greg Moran and David Back in April 2012. In this article, you will find some intriguing information about the life of David Back.
David Back is one of the two co-founders of Zoomcar which is India’s first car rental company specialising in “western-style” self-drive rentals. With seven cars, Zoomcar commenced operations in Bangalore in February 2013. It had expanded to roughly 1,500 automobiles in six locations by the time Back departed day-to-day administration at the end of May 2015.
The company is still expanding, with over 9,000 automobiles in over 45 Indian cities. Zoom is assisting India’s cities in becoming smarter and more sustainable by providing a variety of transportation solutions to meet a variety of demands. Today Zoomcar is having its existence in five countries and 100+ places.
The idea to India was unique and Zoomcar did not have to initially struggle for investments. Their advisors include Former Infosys CFO Mohandas Pai, British politician and entrepreneur Lady Barbary Judge, Former US Treasury Secretary Larry Summers, and academics from Wharton, Harvard Law School, and Cambridge University’s Judge School of Business.
David Back graduated magna cum laude from the University of Pennsylvania and cum laude from Harvard Law School, where he held teaching fellowships on the history and prospects of globalisation under Niall Ferguson and Larry Summers. He was given a full scholarship to study for an MBA at Cambridge University’s Judge School of Business. But fortunately and unfortunately he quit out after one term to start Zoomcar in India.
David Back with Greg Moran
David Back has worked in various organizations. Some of them include a consultant for McKinsey & Co., an investment manager for Goldman Sachs, and a research analyst for the Kauffman Foundation’s General Counsel too. He also has worked and contributed to The Hydrogen Expedition. This was a campaign to raise awareness about alternative fuels by circumnavigating the world on a hydrogen fuel cell-powered boat. David is exceptional with his career and serves on the boards of advisers for a number of start-ups in the US, India, and the UK.
David Back also edited, 365 Of The Wittiest, Most Cutting Insults From History. It is a page-a-day desk calendar sold to Barnes & Noble Publishing. It features, among other things, critiques from Winston Churchill, Mark Twain, Voltaire, and Mahatma Gandhi too.
David Back’s Journey with Zoomcar
By late 2012, the two founders Greg Moran and David back had collected a significant amount of money, and David and Greg had quit their professions in the United States and relocated to Bangalore, India.
They intended to establish Zoomcar as an hourly rental platform at first. However, it now functions not just on a short-term rental basis, but also on a long-term subscription basis.
Zoomcar is the market leader in India’s self-drive sector, with approximately 10,000 automobiles in its fleet. The company’s golden era began in 2018, when its income topped Rs 155 crore, before skyrocketing to Rs 259 crore the following year. That isn’t to say it didn’t hit some roadblocks along the way. Challenges were unavoidable when launching a whole new company model, from forming a partnership with a fleet vehicle owner to obtaining licence plates for the fleet of automobiles.
David’s Exit from Zoomcar
David Back, the co-founder of Zoomcar, resigned from the self-drive car rental startup in 2015 and returned to the United States for personal reasons. According to paperwork submitted with the Registrar of Companies, Back left ZoomCar India Pvt. Ltd on May 12, 2015.
“It’s been a smooth move for David,” said Greg Moran, co-founder and CEO of Zoomcar. Back’s departure, according to Moran, was prompted by both personal and professional factors. “David has always prioritised early-stage prospects and will do so in the future.”
“I’ve been the company’s CEO since the inception, and his departure will have no influence on the company’s growth trajectory,” he continued. Back will retain his stake and board seat in Zoomcar Inc., the parent company of Zoomcar India, according to Moran. But David never returned to Zoomcar again.
Today, David says that “I was a co-founder of India’s first automobile rental firm. I’m now based in Denver. I am the Chairman of Tattered Cover, the greatest bookstore in the Western Hemisphere.” People like David create a revolution. Zoomcar is one such revolution for our country. There is no denying that India has a market for automobile rentals. However, it has a long way to go before it reaches the maturity of a European or American market. Nonetheless, David continues to grow his life in different spheres and will continue the same ahead in future.
FAQ
Who is David Back?
David Back is the co-founder of Zoomcar, who is now a chairman of Tattered Cover Book Store.
Why did David Back resign from Zoomcar?
David Back exited Zoomcar in 2015 and returned to the United States for personal reasons.
Every Middle-class person has a dream to buy a car. People in India think owning a car is a matter of prestige, while people don’t think that today it’s just an extra burden upon your expenses. Gone are those days when a car was considered a luxury.
Greg Moran and his partner David Back established Zoomcar, a self-drive car rental firm that allows users to hire vehicles on an hourly, daily, or weekly basis, to modify and cultivate this mindset.
University of Pennsylvania, University of Southern California
Title
CEO & Co-founder of Zoomcar
Greg Moran: Personal Life
Greg Moran was born in the New York City of America. His parents had a love marriage; his mother was an Italian lady who shifted to New York after her marriage.
Greg did his early schooling in New York and went to Philadelphia for his graduation at the University of Pennsylvania. He studied International relations. Greg is also fond of cooking and his specialties are pasta in fresh pesto or meatball, coconut curry with prawn or chicken, salads, and chocolate cheesecake. Not only he tells about his cooking but has a craze to visit a Dosa eating competition sometime.
Greg has a lot of hobbies that include playing piano and hitting the golf links. When he is not doing work and zooming around he goes to visit different golf fields.
He is also researching sustainable development to create a sustainable economic zone for the people around the globe.
Greg Moran: Career
After graduating from the University of Pennsylvania, he began his career at Cerberus Capital Management as Summer Associate from July 2006 to August 2006. In 2007 he joined Fieldstone Private Capital Group Ltd as a Financial Analyst. After doing the job for several years, in 2011 he opened up his firm Greg Moran Consulting.
With the failure of his consulting company, in 2013 he and David Back founded Zoomcar, a self-drive rental car-based company in India. David returned to the US in 2005 after his marriage and Greg continued with Zoomcar and services in India.
Greg has also worked in the worldwide energy and infrastructure industries in a variety of financial, operational, and strategic capacities. Greg was involved with projects worth over $12 billion on six continents at this time. Solar power, wind power, and energy storage were among his major focus areas within the industry. Zoomcar is also a model of sustainable development that also caters to the self mobility needs of people in India.
Greg Moran: About Zoomcar
The Self Drive Car rental company was initiated in Bangalore in 2013. It was first started with an initial investment of $215,000 and a pack of seven cars. Zoomcar was a new concept in 2013 as there was a rise in Ola and Uber that were providing a chauffeur-based service, whereas Zoomcar was one offering a 100% pure-play, self-drive car rental service in India.
In India, that was a big step forward. It was understood that there would be demand for this kind of service, it also had the potential to grow and blow up the Indian markets.
Zoomcar services allow customers to hire a car and drive it whenever they want, and they also provide a large selection of automobiles to meet an individual’s demands at the touch of a button.
Zoomcar provides their customer a hassle-free experience by saving a lot of money without any long-term commitments. Greg came up with advancements for Zoomcar as technology progressed, such as the ability for customers to check availability and reserve a car of their liking with the touch of a button on their smartphones.
Greg Moran: Vision
Greg is always passionate about sustainability and has a dream to create a better sustainable economic development model for people all around the world. He also once said in an interview that ‘If not Zoomcar, I would likely have been an investor in technology companies within the sustainability domain.’
Although Zoomcar’s business strategy is based on sustainability, it also responds to the market’s demand for easy self-drive transportation. However, Zoomcar has always succeeded in carving a niche for the disruptive offering.
Several startups and taxi aggregators have followed Zoomcar’s lead and entered the self-drive mobility market, which only serves as confirmation of our goals. One of the focus areas is by adding more and more vehicle models which will be offered to the customers on a subscription basis.
A survey has shown about 50-60% majority in the demand for premium hatchback in 2019 but as of now, it has gone up by 70-80% in the recent 3-4 months of post-Covid-19 lockdown. The company will now be attentive to the subscribed customers and will provide additional benefits to satisfy their needs.
Even nevertheless, the need for mobility service is as pressing as ever. Because individuals would avoid taking public transportation to stay safe from the virus, the demand for rental vehicles will only increase. This industry is looking at various car subscription models to serve the needs of the customers and increase the business in the car rental industry.
FAQ
What is the education qualification of Greg Moran?
Greg Moran has completed his B.A in International Relations from University of Pennsylvania.
When did Greg Moran founded Zoomcar?
Greg Moran and David Back founded Zoomcar in 2012.
Just like other industries, the Covid-19 recession has crushed the travel and tourism industry and thus affected the car rental market in India. But with the increase in the vaccination drive and return to normalcy, the industry witnessed a surge in its service.
The car rental market is projected to reach US$1,973m in 2021 and is expected to show an annual growth rate (CAGR 2021-2025) of 12.38%, resulting in a projected market volume of US$3,147m by 2025, as per the reports of Statista.
Here’s what you need to know about the car rental industry in India.
These days, it has become convenient for people to book or rent a car from anywhere via technology-enabled online car rental services that can be accessed with just a touch or tap of a button.
Today, everyone owns a smartphone and accessing such services seem as easy as pie. There are just three steps: Pick, check availability, book the car, and it’s done. Amidst the use of technology tools in one’s car rental business, the rental service option is holding rich potential for expanding services and improving access for many users all-round.
However, such online platforms have managed to speed up the growth of the Indian car rental industry and have also enabled several offline service providers to upgrade their business model and more importantly by following the digital route.
Advantages of Car Rental
1. Easy Access
With being the most eminent in the travel industry, Car Rentals offers the best automobile options based on customers’ requirements. From travelling to another city to being a part of a business meeting, car rental services surpass all expectations.
2. Liberty from repair and maintenance
The biggest advantage that rental cars have attained over personal cars is perhaps the relaxing guidelines for repair and maintenance. Most car rental companies have a basic protocol in case of any accidental damages caused to their vehicles by the customer, which involves the advance security deposit or minimal charges.
3. Cost-effective
Relatively speaking, the rental car industry is the economic hub, because of its dominance over personally owned cars, especially when it comes to being pocket-friendly. The travelling option is cost-effective allowing the customers to save more, at the same time offering a hassle-free experience.
4. Elasticity in vehicle hire option
A typical hatchback car can fit just 5 people. However, car rentals could be the best choice when it comes to travelling in a larger group. The majority of the car rental service providers allow the users to pick personalized cars as per their travelling needs. Although some have an in-house team of dedicated experts to assist customers to make a better selection of a vehicle based on their individual requirements.
Myles was founded in 2013 by Sakshi Vij. It is a leading self-drive car rental service provider in India. The cars offered by Myles range from economical hatchbacks to SUVs.
Myles Website
ZoomCar
ZoomCar is a car rental company that also started its journey in the year 2013. It allows the user to rent cars on an hour, day, week, and monthly basis. ZoomCar is headquartered in Bangalore and has spread its services in Pune, Delhi NCR, Mumbai, Chennai, and Hyderabad.
The car rental industry has started accelerating in India amid the Covid-19 pandemic itself. The continuous upscaling of India’s vaccination drive and return to normalcy has fueled the demand volume of rental vehicles. People are getting more confident to step out of their homes and travel. The industry is expected to reach the pre-Covid-19 situation soon.
FAQs
What type of business is a car rental company?
A car rental company is a type of business that leases cars for a shorter duration of time like a few hours or a few weeks.
How much does it cost to rent a car in India?
On average, a rental car in India costs ₹2000 per day.
Is the car rental business profitable in India?
The car rental business in India can be quite lucrative and profitable if you learn what steps should be taken in order to maximize your odds of success.
Can I give my private car for rent?
Yes, you can give your car on a rent basis to the companies.
How big is the car rental industry?
The car rental market is projected to reach US$1,973m in 2021 and is expected to show an annual growth rate (CAGR 2021-2025) of 12.38%, resulting in a projected market volume of US$3,147m by 2025, as per the reports of Statista.
Who are the major players in the car rental industry?
The major players in the car rental industry are as follows:
Nitin Konde
