October 14, 2016
 
Self drive Car Rentals
Self Drive cars

Self-driving in Car Rentals targets the young, middle class and leisure travellers in showcasing various destinations of India in a report by Irene Susan Eapen

Self-driving in the Car Rental segment is a popular concept especially in the metros of India for weekend gateways. People prefer to rent a car nowadays for a number of days to explore any destination through Self-drive tours. Self-driving in car rentals also becomes a bonus for domestic and international travellers in India through adventure trips, road trips and solo trips.

According to Ken Research, the Indian car rental market revenues will grow at a considerable CAGR rate and is expected to touch Rs 800 billion by 2019.

The concept of self-driving tours is widely being promoted in destinations like Madhya Pradesh, Gujarat, Rajasthan, Himachal Pradesh, Leh & Ladakh, Lahaul and Spiti Valley. The overall growth in the car rental segment has been good in India and are expecting an optimistic growth over the years.

Growth in self-driving car rental segment

Sunil Gupta, CEO, Avis India states,“The Indian car rental industry is entering an exciting phase and has witnessed a remarkable growth in the organized car rental segment. The drastic change in the economic scenario of the country, growth of the tourism and aviation industries, the improvement in infrastructure in terms of roads and highways and fast technological development in recent years has fueled the growth of the car rental industry.”

Soham Shah, Founder & Director Pinewoods Service Corporation- selfdrive.in said , “ The Selfdrive.in is India’s first ever company to offer cars on a self-drive rental model. We introduced it in 2011 due to increasing demand from our corporate customers especially ex-pats who preferred to drive the car on their own. It also meant reduced rents for the customer as the cars were not chauffeured. However the retail market opened up a bit later when it witnessed other entrants who came in and educated the masses with huge spends towards marketing. We have witnessed CAGR of 25% over the past 5 years of operations.”

In the opinion of Sunil, "Many diverse business models have emerged in the car rental space lately, ranging from app-based aggregation, car-sharing, car-pooling and one-way inter-city taxi aggregation, adding to the existing chauffeur drive and self-drive car rental markets. It remains to be seen which of the new models become financially viable but all of them are similar in that they leverage technology to deliver customer convenience. The self-drive option has been available to Indian consumers for a couple of years now and it is popular in top metro cities for leisure trips on long week-ends."

Sunil says,"Self-drive holds a lot of potential for growth in India in the coming years. The self-drive option is currently popular in the top metro cities but over the next couple of years, in line with improvements in road infrastructure, the demand will emerge from other Tier I cities. Self-drive may not see a dramatic shift in 2016 over 2015 but over the next 7-10 years self-drive should grow to around 5% of the total car rental market from the current negligible share.”

Soham said,“We are a publically funded company and have robust operations in Pune, Mumbai and Goa. Over the next one year we are planning on introducing our services to the cities of Bengaluru, Hyderabad, Chennai and Delhi. We are also in the process of acquiring funding to fructify these plans. We are expecting a growth of over 30% this year.”

Sunil explains"On a relatively small base, the growth in self-drive has been substantial but some barriers to faster growth remain i.e. traffic congestion, lack of organized parking and lack of driving discipline. These barriers do not exist in developed markets like N America, Europe, Australia and New Zealand and so we see a tremendous growth in Indians taking advantage of self-drive abroad. While we continue to grow our self-drive fleet in the major cities in India, we are also focusing a lot of resources and energy in offering Avis self-drive services to Indians traveling abroad through travel agents, travel management companies and tour operators – online and offline.”

Karan Jain, Co-founder & COO , Revv, says, “India has a very low penetration of car ownership, which is getting accentuated with people starting to rethink car purchases due to availability of taxi-haling apps. This essentially creates an opportunity to delink car usage from car ownership, by allowing non-owners to access and use cars, and by allowing people to defer/cancel their car purchases and subsist on an ecosystem of car-sharing, self-drive rentals, taxi-hailing and ride-sharing.The growth in the overall car rental market has been sharp, especially in self-drive segment.We have seen rapid uptake by the customers despite minimal spend on marketing 70%+ utilisation with multiple sold-out situations every month. Revv is already seeing repeat usage and positive customer feedback on its innovations. Revv is the pioneer of 100% doorstep delivery and unlimited kms pricing plans for hourly self-drive rentals.With the vision to eliminate the need to own a car.

In the opinion of Sakshi Vij , Founder & CEO , Mylescars.com, “Self-drive industry has witnessed phenomenal growth in the last couple of years. We are recording 30-40% growth month on month, measuring to a growth of over 1100% in the last 12 months. Myles cars have driven over a million “myles” already in the last few months. We have seen a surge in demand from the tier-2 cities as well.”

“Myles has seen a steady growth in the last few months. We started with 14 cars and 3 locations has grown to over 1200+ cars and 250+ locations with a presence in 21 Indian cities.We are ramping up our fleet to 5,000 Myles cars over the next 1 year. In the next 4 years we would like to bring together a fleet of 50000 cars in 50 cities spread across over 5000 locations. We want to provide a Myles car every 400 meters in a city. We are currently a community of more than 150,000 Mylers. We hope to get around 5 million members in the next five years.” She added.

Aditya Loomba, Director, ECOS (India) Mobility & Hospitality-explains, “Self-Drive Car Rentals has been growing at 40-50% year on year for the past 4 years and the expected growth rate for 2016 is 30-40%.”

Self-driving a new form of promoting destinations in India

"There is a big potential in promoting Self-Drive Road Tourism for Inbound and Domestic travelers, Tourism Ministry will be required to play a vital role in tapping this potential.” says Aditya .

Sakshi explains, “Self driving has established weekend gateways, short trips and vacations are increasingly getting popular. A young professional drives to work in his sedan, but may want a 4-wheel drive for his adventure holiday.”

Soham explains,“Though the self-drive car rental industry is just about taking shape in India, the concept is not that recent. Goa was the first state in India to offer self-drive options to its tourists. One can rent cars, bikes, scooters and even bicycles in Goa to explore the scenic beauty, beaches in various parts of Goa, the famous temples in south Goa etc. This trend has definitely caught up over the past few years and many other states have been promoting self-drive tours to give tourists more flexibility and freedom to explore.”

Aditya said,“Self-Drive car rentals are primarily targeted towards young to middle aged leisure travelers, the demand is mostly on weekends and holidays.”

Soham states,“Today’s tourists domestic or international do not want to take to the beaten path by availing packages that restrict their travel to pre-defined destinations by the tour companies. Some of the destinations that promote self-drive tours include Madhya Pradesh, Gujarat, Rajasthan, Himachal Pradesh, Leh & Ladakh. Lahaul and Spiti Valley etc.”

Sunil states, “The biggest USP of self-drive as against chauffer drive is that it gives individuals the privacy and independence during their journey. With the growing individualism and my space phenomena, self-drive will gain growing popularity in India.”

Karan says, “Self-drive rentals, being much more reliable and 30-40% cheaper than chauffeured options, brings a wider set of customers into the gamut of frequent leisure travellers. The range of destinations that customers can visit widens compared to similarly-priced public transport options such as railways.”

Soham explains, “The weekend travellers have increased manifold over the past few years. Most metro towns have seen a spike in DINKs or Couples with Double Income and No Kids over the past decade and an increase in disposable income which has resulted in weekend getaways as a lifestyle.”

“Most of the couples want independence to explore the destinations they visit and prefer self-driven cars over taxis or chauffeured rental cars. This trend has seen a surge of car bookings over the weekend compared to weekdays. While we are sold out perpetually every weekend i.e. 100% on Fridays, Saturdays and Sundays, the weekdays have seen a rise in bookings and are at 60% to 75% of capacity. “He says.

Sunil says, “Self-drive market has started to take a shape in India over the last couple of years. There are a few reasons for the growing popularity of self-drive in India. With the changing travel trends there has been a remarkable shift in the way people pursue holidays these days with adventure trips, road trips, and solo excursions etc taking precedence over regular holiday travel and we believe this will contribute to the self-drive business at large. “

“ The Improvement in Infrastructure the pace at which the surface infrastructure (roads and highways) has progressed in India in last few years is creditable. We believe that technology plays an important role in mobility and we will offer latest technology making our services even more convenient for our customers like introduction of nagivation, GPS, keyless entry to cars, etc. In the case of self-drive the discerning Indian consumer is beginning to take notice of the financial benefits car-sharing delivers over car-ownership as there is no cost of EMIs, insurance, ownership, maintenance costs, etc in the short and long term.”He added.

Sakshi explains, “There is an evident shift in the usage pattern where our weekly and monthly bookings have shot up by 80% and 100% respectively. It is an established trend that weekend getaways have been getting popular, however the significant increase in the number of days a car is rented. Over the period of time since our inception we have seen a surge in the demand from customers who are tourists, NRIs, young urban professionals, and single female travelers. We have seen exponential rise in the metros to manage this growing demand.”

Today, searches on our website have grown to over 8 lakh a month from 95,000 a year ago. The concept started in Delhi, Mumbai and Bengaluru has attracted interest in Tier-2 cities like Jaipur, Coimbature, Udaipur, Pune, Mysore and more. The positive response has encouraged us to expand the operations to smaller cities and new markets.”She added.

Karan says, “Revv has seen that outstation travel is the largest segment and it has been heartening to see it cut across leisure and work-related use cases, as well as weekdays across weekends. Over a period of time, we are noticing a larger share in work-related self-drive segment. This can go-on to approximately 40-50% share in the long term. The long-duration local use eg, someone landing up in a city and hiring a car to drive around for 3 days is the other major use case.We believe this could be USD 3-5 Bn revenue market by 2020.”

Trends

In the opinion of Soham,“An interesting trend we have witnessed lately is an increase in SUV/Sports/Luxury car rentals. There are many driving enthusiasts out there who want to experience big/fast cars for the thrill and adventure of driving.” He added.

Cities using your service

Aditya says, “The Chauffeur Drive service is in 65 cities across India. The Self-Drive service is in 5 Cities Delhi, Gurgaon, Noida, Mumbai and Bangalore.”

Benefits to the travel industry

Aditya says,“Tourism Industry of Countries like New Zealand, South Africa, USA and Europe thrive on Self-Drive tourism, as the Car product can be clubbed with various other components like accommodation, sightseeing tickets, food vouchers and GPS device rentals etc. We will be happy to partner with various stake holders of the Tourism fraternity to make Road Toursim packages for the states in North India, South India and West India.”

Soham explains,“Self-drive car rental offerings have been a boon to domestic as well as foreign travellers to and in India. While it has been a long drawn offering in the developed nations its advent in India as completely changed the face of travel in India.To take it a step further lets categorize the travellers especially ex-pats into two buckets namely, the business traveller and the leisure traveller.”

“A self-driven car gives the business traveller the option of hiring a car right from the airport for the length of his/her stay to avail the convenience of being independent as compared to the traditional chauffeured cab that is far more expensive, rigid in their tariffs and inherent dependence on the drivers. The self-drive option gives them greater flexibility, choice of cars, seamless and transparent customer centric experience. For the leisure traveller, the self-drive option provides a completely independent and leisurely experience of discovering India like they would otherwise never have. All in all it is great news for the travel industry as a whole.” He added.

Sunil explains, “Surface transport is an integral part of the travel industry as it contributes to the value chain by enabling the last mile travel.Self-drive is a recognized and matured industry abroad. The Indian Inbound travel industry is witnessing a growth of 8.9% year-on-year.”

“The number of Foreign Tourist Arrivals (FTAs) has grown at a CAGR of 3.7 per cent to 5.29 lakh year-on-year in May 2016. As most of the travelers from developed source markets are pre disposed to the concept of self-drive, it gives an opportunity for self-drive operators in India to capitalize on this growing demand. At the same time, selling self-drive services to Indians travelling abroad will emerge as a new revenue stream for travel agents in India, who are struggling in the face of declining commissions from airlines.”He added.

Sakshi says, “It’s a win-win situation for the industry and travellers. The aim is to connect the traveller to a car, offer commuters an alternative method of transportation which is cost-effective, time-saving and based on the need.”

Karan explains, “Inter-city travel is a BIG white space, with severe paucity of reliable and affordable travel options especially when a group of 3-5 people is travelling. Self-drive is opening up the hitherto untapped intercity segment, and that is a significant contribution to travel industry.”

Longest self-drive route

“Our longest self-drive route is from Leh to Goa that we have done in Self-Drive tourism. The 4x4 SUV vehicles were dropped off in Leh and picked up from Goa after 5 weeks.” Aditya added.

Promotional plans

Aditya says, “We upgrade our regular clients to higher category cars. We also have special promotions running on our Chrysler Stretched Limousines.”

Soham said, “Our latest product offerings are ‘City Drive and ‘Micro Lease’. Under the ‘City Drive’ initiative, one can avail the scheme at a minimum booking of an hour at Rs. 60 per hour. The ‘CITY DRIVE’ also has an ultra-low deposit of only Rs. 999 only. The cost includes Maintenance, Insurance and 24x7 Road Side Assist and free fuel of up to INR 500.This unique initiative from SelfDrive.in comes with unlimited kilometres package and offers over 50 car models to choose from, covering small, medium, large and fun cars to drive.”

“The initiative launched is for rental within city limits and can be availed for a minimum of one hour to maximum of 24 hours. To increase convenience to customers, we are also offering them an option of pick-up from any location and drop off at any location. The initiative has been rolled out in the locations of Pune, Mumbai and Goa to start with and will be rolled out PAN India next couple of months.The Micro Lease program was designed after consistent feedback from our corporate clients for the need to provide more flexible lease tenures.”He says.

“Our program enables Corporates to lease a car starting from a minimum period of one month instead of three years. Over and above a wide range of cars to choose from, the program offers Car lease on a monthly subscription/monthly payment options starting at INR 12, 499 which is comparable to (and in some cases lower than) EMIs for the car, 24x7 road side assistance, complete maintenance of the car and replacement and/or upgradation of the type of car, as and when required with no penalties for returning the car after three months.” He added.

Sunil explains, “Internationally, Avis is the world’s leading car rental company with self-drive as its main stay in 168 countries. We have aggressive plans to capitalize on the growing demand for self-drive domestically and internationally. In India, we plan to expand our current fleet with the introduction of new cars in various segments such as compacts, sedans, SUVs, MUVs and Luxury along with product innovations such as car upgrade, home delivery and pick up of vehicle, etc. In the area of customer experience we will introduce the use of modern technology such as Mobile APP for reservations.”

“For the globetrotting Indians, we enabled renting of self-drive cars to any of the 168 Avis countries through our Indian website.(www.avis.co.in) This will allow the customer to pre-book and pre-pay for his car sitting in India . We have also created a travel partner program for travel agents and tour operators. Through this program we aim to consolidate the global self-drive opportunity under one roof. In the next 6 months, through our outreach program, we plan to introduce this travel program to every Indian travel partner who has an international focus.” He added.

Karan concludes, “We are currently focused on providing an outstanding experience to every single customer who comes to us. This solves multiple problems at once: 1) the strong word-of-mouth publicity eliminates need for expensive marketing, 2) customers start sticking to the product which in turn starts the process of this becoming a truly mainstream mobility option, and 3) our brand becomes stronger with every positive reference.We are planning rapid addition to the fleet during next few months, which will entail referrals, partnerships and cross-promotions with other companies who serve the same customer segments, and innovative contests that induce the customers.”

Gallery: 

Self driving in Lavasa
Self driving car
Self drive rental cars
Self drive car

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