The growing ubiquity of e-commerce transactions has made personalised items such as clothes, books, groceries and electronic items, apart from services such as cleaners and even tailoring, easily available for customers to order online. Alongside this burgeoning growth, even the personal mobility sector has taken some sharp detours. There is a definite change in consumer behaviour patterns and it calls for customised solutions.

Over the last decade, there has been a sea change in the mobility paradigm, from chauffeur-driven to car-pooling to radio-cabs and, more recently, a sudden tilt towards self-drive car rentals. In mobility dynamics, the self-drive car rental industry is the next potential unicorn.

Indian self-driven car market The market for self-drive car rentals in the country opened up during 2010, with only 2,000 cars being offered on a self-drive basis. The concept of car rentals soon gained wide popularity and thus, the self-driven car market was able to post revenues worth ₹500 million during financial year 2013. In addition to this, a rising urban population, growth in personal disposable income and increasing preference towards car travel for long-distance leisure trips have further spurred the growth of this market.

The self-drive car rental market has been driven by convenience, privacy, cost benefits by saving on driver expenses, improved customer service and choosing a vehicle of one’s own choice. All these have helped the segment see considerable growth momentum.

Global performance The market for self-drive car rental in India has substantially evolved over the last two years during 2013-2015. In India, the car rental for self-driven vehicles is in the inception stage, whereas in China and Brazil the market has developed. In the US, this is already a mature market with a large number of people opting for self-drive rental cars.

The short-term goal of any company operating in this domain in India is to popularise the notion of self-drive car rentals and to make the market really take off through a product that mimics the privacy and convenience of one’s own car. The customer profile of the self-drive car rental industry is diverse and the facility is used by people from various demographics.

A drive through the challenges The car rental market in India is complementary to car sales, as higher car sales will enable a higher availability of cars for rental purposes. The self-driven car rental market operates at a distinct level as younger people prefer to opt for self-drive cars for long-distance leisure purposes. During FY-2013 and FY-2014, 13 people out of every 1,000 people owned a car; in FY-2015, this number had increased to 14 cars per 1,000 people. There is a wide, untapped population base unaware of the self-drive car rental segment. A large proportion of the population still relies on autorickshaws and cabs, which pose a major threat to the growth of this market, especially the latter.

The outlook for the period FY-2016-FY-2020 seems promising for the self-driven car rental industry in India. It is anticipated that the market will witness an upsurge in the self-drive car rental fleet size, rising to 80,000 cars by FY- 2020.

Self-drive cars give you the liberty and comfort of driving your family around on holiday, of having a vehicle that’s practically yours when your own car goes in for repairs or servicing, and enable you to pick a car of your choice, as per your driving convenience, with no hassle of monthly EMIs, maintenance or parking expenses. Likewise, with rising driver costs and shortage of drivers in India, the chauffeur-driven model is expected to decline in the future, offering a big opportunity for self-driven car rentals.

With customer preferences becoming more fine-tuned, targeted solutions have become critical. The self-drive car industry is one such mushrooming sector, which is set to cater to such niche driving needs and holds the potential for exponential growth.

Vikas Parasrampuria is Founder & CEO, Voler Cars

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