The Indian self-drive and car rental industry has come a long way since American duo David Back & Greg Moran founded Zoomcar in Bengaluru in 2012. As the self-drive service enters its sixth year in operation, it aims to bring 20,000 new car subscribers and touch 20 million unique self-driving user mark by the end of this year on the back of their subscription service, Zap, and other diversification strategies in the micro-mobility segment.
Greg Moran, co-founder and CEO, Zoomcar, talks to Fortune India about their latest subscription-based service and the growing pie of car rental services in India.
Edited excerpts:
You have tapped a nascent market for self-drive cars like India. What’s next?
We have our eye on the scooter space. We believe that we are now in a position to make a very large dent in that space. We’re looking at electric scooters more seriously. We already operate e-scooters in Bangalore and this is something we have got a lot of learning in, in last six months. We have engaged with a lot of players like Hero Electric, Okinawa, Ampere etc. I expect by the end of the year, we’ll have close to 20 names in the electric two-wheeler space to tie up with. Eventually, we would like to diversify to other emerging markets like Africa, south east Asia, Middle East North Africa (MENA), Latin America etc.
What happened to your cycle-sharing platform Pedl that was discontinued?
We started our cycle-sharing about 13-14 months ago. We kicked it off in five main cities and actually saw very strong user adoption there. We saw over 3.5 million transactions in that time frame. So, the popularity or the demand is certainly there. It was focused and oriented around last mile connectivity. It’s affordable as you spend like five bucks. It’s cheaper and more convenient than any other alternative. But we paused it a few months back because of the cycle quality itself. We need to look at durability, the brakes, the chains, the frame, seats etc. given the fact that it has a shared use case. Now we’re approaching more Indian manufacturers who could make it not just for individual use but for a mixed-use model. We need to have a very rugged, custom cycle that’s going to suit this environment. Most likely we’ll be re-launching in the first part of next year.
Is demand a huge challenge in India?
With anything in mobility in India, demand is never a concern. The challenge is always can you scale supply very quickly, can you maintain user experience, can you ensure that the regulation stays fairly favorable to you. Challenges are growing your supply quickly enough to keep up with your demand. That’s a constant challenge. Plus, there is something very powerful about having one single app for all your self-drive needs and subscription is a powerful lever because that really unlocks a lot when you think about multi-category.
What’s your subscription-based model ZAP all about?
In the last 10 months, we have now close to 4000 subscriptions. For us, the focus is on the subscription model. If you as an individual subscribe, for say, 12 months, Zoomcar will do the packaging which will include the cost of the car, insurance, maintenance etc. So, as a subscriber, you don’t actually have to put any money down. So, it’s basically owning a car without actually owning a car. It’s all the benefits of owning a car without any of the hassles. This is picking up in India at a faster rate than ever. In the U.S., 40% of new cars are for lease financing. In India, that number is zero and that’s the kind of opportunity. It’s a totally nascent market.
You have tied up with auto giants like Mahindra and Tata to get into the electric space? How do you view India’s current electric ecosystem?
Electric cars may actually take several years to hit the escape velocity. It’s actually in 5-7 years when you’ll see real movement in electric cars and that’s largely driven by policy, the market, and to some extent the infrastructure. Electric two and three wheelers can make a mark in the next 2-3 years. We work a lot with these guys on the electric side for the subscription model. The idea is to collaborate with vehicles for getting the overall movement in place. For example, Tata power is a very dominant player in terms of their distribution, Tata steel can do a bit more on the infrastructure side and TCS can help the overall ecosystem develop. Companies like Tata and Mahindra are a lot more collaborative in making the whole ecosystem work.
