As city dwellers discover the benefits of ride sharing, as authorities encourage public transport to tackle pollution and reduce pressure on space, as young professionals look at alternatives to owning a car or at least doing away with a second one, the self-driven rented cars business is bound to grow, according to Sakshi Vij, founder & CEO of Myles.
Plus there are youngsters wanting to try out luxury cars that they cannot yet afford, and enthusiasts who may want to try out a hot hatch, an SUV and a four-wheel drive — how many cars can one buy?
Here, too, Myles sees vast opportunity. Business has multiplied seven times over the past couple of years, said Vij. Myles started with 14 cars in three cities and now its fleet is spread across 250 locations in 21 cities.
Over the next year, it hopes to increase to 5,000 vehicles. The company follows an asset-light model, tying up with fleet operators who are keen to tap this emerging opportunity. While not sharing specific numbers, Vij said the rate of return for a fleet operator can be as high as 41 per cent over the life of a car.
The car-sharing business is estimated at about 6,000 vehicles now and is expected to grow to over 2 lakh in four years. Myles’ target is a 25 per cent share of this opportunity, said Vij.
She cites global trends — in the US, where self-drive cars on rent have been in vogue for over five decades, the current fleet strength is over 2 million. In India, over 2.5 million passenger cars are sold annually. Even a fraction of this in self-drive business is a huge number.
Savvy youngsters also see the cost benefits — why own a car to leave it idling through most of the day?
An efficiently shared car can meet the needs of 25 persons. That is a huge saving for individuals, pointed out Vij. Also, the value of a vehicle only depreciates over time unlike an investment in an immovable property that gains value.
Simple paper work For the business, the trick is to ensure customer convenience, and keep the paper work simple — just a valid licence and address proof is sufficient to rent a car.
The fleet should be young and insurance adequate to fully cover all contingencies. Information and communication technology helps to keep track of vehicles, ensure safe operations and provide on-road assistance whenever needed, said Vij.
It will soon launch an intercity transfer facility where a customer can pick up a car in one city and leave it in another. This will be a huge customer convenience, she said.
Car rental firm Carzonrent has invested over $5 million in Myles, which is now in talks with various PE firms for additional funding.