Self-drive start-up Revv to hit the fastlane

Revv, a 10-month-old start-up that provides cars for self-driving, now plans to scale up and crowd source vehicles to expand its fleet.

Broadly, this is how the model will work. You buy a four-wheeler ranging ₹5-8 lakh on a loan with 10-per cent down payment and register it in Revv’s name, to be a part of its fleet. In return, Revv will pay your equal monthly instalment (EMI) on a four-year loan, and also pay you a portion of its profit or pre-decided premium every month.

“The additional payment depends on the scheme one chooses. It’s up to the user to opt for a high-risk, high-return profit share option, or a minimum guarantee option. An user with enough money can also buy a car without any loan and take EMIs and the additional payments from Revv. After three-four years, users have the option to own the vehicle, using residual value,” Revv CEO and co-founder Anupam Agarwal told BusinessLine .

Revv is tying up with financiers for the scheme, which will offer some discount on vehicles and provide loans at lower interest rates. In case of repayment problems, Revv and the user will be jointly responsible.

Car rental growth The growth in the car rental segment has been sharp, say Revv’s founders Anupam Agarwal and Karan Jain, who claim to be the first in the segment globally to start delivering cars at the customer’s doorstep. The founders, who were earlier with McKinsey, raised $2 million in June 2015 for the start-up.

In the past 10 months, Revv has seen its fleet grow from nine to over 300 cars, with vehicle utilisation levels growing to 65-70 per cent from 45 per cent initially, in cities such as Delhi, Bengaluru, Hyderabad and Mumbai.

At present, Revv owns 50 per cent of its assets and has sourced the remaining from companies in the operating lease space, apart from sourcing from car-rental companies on a profit-share basis. “The crowd-sourcing scheme is comparable or marginally expensive than the leasing option. But it will provide us scalability,” Jain adds.

The 200-team start-up, which has already raised angel funding, has seen over 15,000 bookings, of which 30-40 per cent are from repeat customers. Interestingly, Revv counts the Indian Railways as its competition, as a trader who used trains once every 10 days carrying his inventory, opts for Revv after facing problems getting reserved tickets.

Revv operates largely in the B2C segment, with a 10-15-per cent usage in the B2B segment. The other players in the segment include Zoomcar.

Another player in the self-driving segment is Myles -- a subsidiary of Carzonrent, which offers chauffeur-driven cars -- though it has not gone for crowd sourcing yet. It has also seen a sharp growth, and has a fleet of 1,200-1,300 vehicles across 21 cities, recording 30-35-per cent month-on-month growth in the past one year, Sakshi Vij, Founder and CEO, Myles, told BusinessLine . Myles has also seen increased usage with customers requesting for travel every 7-10 days instead of 35-40 days earlier.

Usage patterns According to Revv, in the self-driven segment, some 70 per cent of the trips are inter-city travel, with each booking lasting an average 36 hours and vehicles running an average of 400-500 km a day. The case is similar with Myles, which has now started seeing use of self-driven cars for corporate travel as well as by housewives.

Interestingly, Revv, which also tracks driver behaviour, based on speed and lane driving, found the average Indian user behaviour good, though there were “one or two” attempts to steal the car. With some reluctance, the start-up shared that driver behaviour in Hyderabad and Bengaluru was lot better than in Delhi.

Revv says that on a later stage it will take into account safety ratings to introduce dynamic pricing, charging lower prices for safer drivers. “We have to be careful so that users don’t think we are unnecessarily charging them high in the name of rash driving,” said Agarwal. Myles said it also keeps a record of driver behaviour.

While Bengaluru induces more weekend travel, with the difference being 20 per cent, the difference between weekend and weekday travel in Hyderabad is 5-10 per cent and in Delhi it is 10-15 per cent, said Jain.

COMMENT NOW