Today we speak to Greg Moran, Co-Founder & CEO of ZoomCar to understand the journey of ZoomCar and how it is shaping the car rental business space through its services.
Here is a complete transcript:
TechGraph: What was the story of Zoomcar? How it all got started?
Greg Moran: I have always been passionate about sustainability and a shared model for sustainable economic development. While working in the clean technology and infrastructure disciplines for an investment bank, I witnessed first-hand the opportunities that existed in working for environmentally sustainable solutions in India.
Further exploration revealed the challenges in urban transportation, namely lack of infrastructure that can cushion the hike in personal vehicles. Realizing the toll it was taking on India’s environment and a complete lack of self-drive model– and not just chauffeur-driven car rentals or cab aggregators– led me to spearhead the launch of Zoomcar. I have always been fascinated with India as a market. As a fast-growing economy, it provides entrepreneurs with amazing opportunities to not only scale up their ventures but also deliver a social impact through unique, and oftentimes tech-enabled, service offerings. The opportunities in India, I realized, would only be compounded over the years, and thus, it became imperative for me to be part of India’s growth story by introducing sustainable self-drive models that cater to the challenges in mobility at large.
The business model of Zoomcar not only revolves around sustainability but also caters to the market need for convenient self-drive mobility. There is always a risk whenever a new category is launched. However, at Zoomcar, we believe that we have succeeded in carving a niche for this disruptive offering. We now see several start-ups and cab aggregators follow our lead and venture into self-drive mobility, which only comes as a validation for what we had set out to achieve.
TechGraph: How has Covid-19 changed transportation in India?
Greg Moran: COVID-19 has changed the dynamics of our economy indeed. What used to be the norm till last year may well become obsolete in the coming weeks. Therefore, each industry needs to adapt itself to the new normal. The car rental industry, to that end, is well-equipped and prepared to serve its customers. There is an exponential spike in demand expected for car subscriptions, especially considering the current recession, car subscriptions can prove to be a better option than ride-hailing and as a more affordable and quicker way of acquiring a car, delivering a safe personal mobility replacement.
The last couple of months have been quite a wild ride for everyone and particularly for those in the mobility sector! In the last few weeks of May, we began to gradually build up operations and saw bookings and subscriptions come back strongly. We are already seeing a 400% rise in demand and we expect this to settle down at 200-300% over the next few months. People are now looking for shorter-term mobility options as opposed to the long-term expense of owning a car.
We have seen a steady rise in demand for cars for personal work and emergency use cases. This December we witnessed a 2x jump in short-term rentals compared to the same period last year. We have also seen a 100% recovery from the end of October. I think this is an interesting time for our business because everyone is in a constant state of evolution.
TechGraph: What is more beneficial for people in need of a vehicle – Buying, Leasing, Subscription, or Rental?
Greg Moran: Owning a car, which once was a matter of prestige, is today seen only as an added commitment. Car ownership comes with its fair share of recurring costs such as EMIs, insurance, repairs and maintenance, and the annual depreciation value. Thus, millennials are now preferring instant gratification without long-term commitment weighing them down.
This is where self-drive car rental services come into play. Car rental services allow users to drive the car of their choice and pay rent for the usage. Besides, the onset of the pandemic has made it difficult for people to buy a new car. The rental car industry, hence, emerged as the way out. With car rentals, it has become easier for users to find the right vehicle based on their requirements. Whether one needs a car for a vacation, attending a business meeting, or simply traveling to another city with family, car rental services are offering a wide range of vehicles suiting an individual’s needs just at the click of a button.
Renting a car allows users to save a great deal of money while enjoying hassle-free services without any long-term commitments. We also have flexible subscription models which yet again are acting as a boon in times of pandemic.
Hence, with car rental options, users can now drive a car with a nominal subscription cost which is free of maintenance and other additional expenses that come with a personal vehicle. Tech-powered car rental services can be availed with the click of a button on our smartphones, making it easier for users to check the availability and book a car of their choice.
Integration of comprehensive technology along with safety measures in the car rental services has further ensured businesses to expand their services on a wide user spectrum and improve the overall user experience. The rental car industry is poised for explosive growth over the next few years and is certainly a sustainable model.
TechGraph: What is Zoomcar Mobility Services and What services can customers avail from Zoomcar?
Greg Moran: The mobility industry is going through a transformational phase globally due to the pandemic. At Zoomcar, we believe this is the ideal time to realize the second phase of our broader mobility vision that focuses on bringing disproportionate efficiency gains across the ecosystem through the adoption of innovative, product-driven software solutions.
Zoomcar Mobility Services (ZMS) is Zoomcar’s B2B SaaS offering providing a full-stack of mobility software solutions across vehicle segments. With the launch of ZMS, Zoomcar will now provide access to its state-of-the-art, proprietary tech stack which focuses on reducing operating costs, enhancing safety, increasing vehicle monetization, and improving customer engagement.
This B2B Saas offering is a more diversified approach to complement our existing B2C business where we are going direct to consumers on the rental and subscription side. ZMS is more of an extension of what we have been using ourselves and expanding that and diversifying to a broader medium. We expect ZMS to constitute about 25-30 % of our overall revenue within the next 6 months.
ZMS comprises two primary software offerings: IoT as a service combined with subscription as a service. The ZMS platform solution is geography agnostic and will help drive Zoomcar’s international footprint while serving customers across 3 continents within the next year. Apart from IoT as a service, the other primary software vertical of ZMS is subscription as a service.
This offering builds on Zoomcar’s own direct to consumer subscription business and allows OEMs and dealers to leverage Zoomcar APIs to directly sell vehicles on subscription to customers. As part of the offering, Zoomcar provides an end-to-end white-label experience for its OEM partners and includes a 360-degree mobile experience for the vehicle subscriber. Moreover, ZMS integrates its existing IoT as a service capability on the white-labeled mobile app to create a bundled offering to the OEM and the end subscriber.
As part of its India-based offering, Zoomcar will also allow the OEM’s customers to ‘share back’ the vehicle on Zoomcar’s short-term rental platform to help reduce the monthly subscription obligation, thereby dramatically reducing the cost of personal vehicle access in India. With ZMS, Zoomcar introduces a one-stop-shop mobility offering for OEMs and operators alike to help dramatically reduce operating costs while meaningfully increasing monetization opportunities at both the vehicle and customer levels.
Our diverse array of software-based platform services can be used across the entire spectrum of vehicle categories ranging from 2-wheelers, 3-wheelers, 4-wheelers, trucks, and buses. ZMS will work across both internal combustion and electric vehicles and is fully hardware agnostic. ZMS reflects the gross margin profile of typical enterprise Saas businesses and will contribute meaningfully to the company’s stated profitability targets within this fiscal year.
While our first offerings are here in India, this is a global product. In the coming weeks and months, we will be announcing several key partnerships with operating partners and OEM partners abroad and not just in India. On the renter side, our focus will remain in the top ten cities like Bangalore, Delhi, Mumbai, Chennai, Kolkata, Ahmadabad, etc these are the big markets for our service.
TechGraph: What are your expectations for the year 2021? What are the future trends that you are expecting?
Greg Moran: People are now looking for shorter-term mobility access as opposed to long-term investment. We have seen a rise in demand for cars for personal work and emergency use cases. Rentals for intercity travel are up. The notion of owning a car amidst such an intensifying emphasis on social distance may have taken the backseat.
Still, the necessity of a mobility service remains as relevant as before. As people would avoid public transport to keep themselves safe from contracting the virus, the need for rental cars will only go up. The industry is looking at various car subscription models to serve the needs of the customers. We also see more demand for in-city trips compared to outstation ones and a strong focus on shorter-term subscriptions.
One of our focus areas has been increasing this exponentially by adding more and more vehicle models which will be offered on a subscription basis. The big markets for us have been the top 5 metros Bangalore, Hyderabad Mumbai Delhi, and Chennai, this constitutes the majority of our demand. Historically we have seen about 50-60% hatch or premium hatch like swift up to the line of the segment between 50-60% of distribution, that has gone to 75-80%in the last 3-4 months post covid lockdown.
So, we are seeing people with lower income levels who are pinched are gravitating towards lower 6.5 lacs and under. If you look at the vehicles, that are outside the hatch we are seeing the SUV segment like Creta that are popular while the 7 seater SUV has not been as popular post-Covid. So, it is the hatch that is dominating and then the compact SUV’s coming at you in the 8 lacs to 10.5 lacs segment.
