Covid drives Zoomcar off smooth track

The outbreak of Covid-19 broke the back of the mobility sector, with revenue falling below 95 per cent for most players in the first few months.

Calendar year 2020 was a tough year for self-drive car rental start-up Zoomcar as well. While its standalone revenue increased marginally from ₹266.6 crore in FY 2019 to ₹294.6 crore in FY 2020, its net losses more than doubled from ₹202 crore in FY 2019 to ₹424.3 crore in FY 2020, as per financial data accessed by business intelligence platform, Tofler.

Its operations were completely shut from mid-March through August due to coronavirus-led lockdowns across the country. As the lockdown eased and Zoomcar opened up for business, there was a huge surge in demand, however there were not enough cars in supply.

Meanwhile, complaints from irate customers kept mounting on social media about Zoomcar’s non-payment of security deposit refunds for cancellations of trips and fuel refill refunds and vendors complained about non-payment of dues over the last 12-16 months. Surprising, considering that Zoomcar raised $30 million in January 2020 as part of its $100-million ongoing Series D fund raise.

Zoomcar raises $30 million as part of its $100-million ongoing Series D fund-raise plans

Customer tweets

A company representative from DriveU, a Zoomcar vendor, told BusinessLine that, Zoomcar owes DriveU ₹50 lakh which it hasn’t repaid since the last 16 months. “We have stopped working with Zoomcar since January 2020 and besides filing a lawsuit against Zoomcar we hired a debt collector in June 2020 but the collector was unable to recover the dues because Zoomcar offices had shut down”, the representative said. DriveU’s drivers picked and dropped Zoomcars at customer homes.

Zoomcar’s Twitter page is filled with customer tweets, asking the company to refund amounts ranging from ₹6,500 to ₹21,209 and more, telling others of the company’s poor service and “automated customer service responses” to their repeated requests for refunds. Javed Khan tweeted saying Zoomcar has not refunded ₹6,500 due to him for three bookings made in November. “Extremely disappointing service” he tweeted.

“As per Zoomcar policy, if our booking has fuel included and during the booking if the fuel gets over, then the customer can fill the fuel, take a copy of the bill and upload it via the app to receive the refund within 30 working days. It’s been four months and Zoomcar hasn’t replied to my mails. I have also shared video evidence of my bookings, screenshots, but they continue to reply to tweets saying, sorry for the inconvenience. I even tried the auto refund feature on their app, with no success,” Khan told BusinessLine over a call from Mumbai.

A former employee, a data analyst, in a post on Glassdoor on November 6, 2020, said, “I worked at Zoomcar full-time for more than a year. Company hasn’t paid their vendors since March 2020, they haven’t paid ex-employees notice period salaries or previous dues. They owe over ₹15 crore in refund to customers, at least!”

Zoomcar response

On being contacted, a Zoomcar India spokesperson said, “We’ve consistently seen demand outstrip supply over our history and this is no different now as we emerge from Covid. We haven’t faced any material challenges tied to refunds as such. These complaints represent <1 per cent of our overall bookings and users. Zoomcar’s operations were completely shut due to coronavirus-led lockdowns in India from the middle of March through August. As lockdowns eased and Zoomcar opened up for business, there was a huge surge in demand, and with not enough cars in supply, we faced the problem of some refunds piling up. We are actively addressing the issue and looking to sort it out over the coming month.”

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