Zoomcar, a self-drive car rental company, has been growing at a fast pace in India. After five years of operation, the company’s service is available in 29 cities in the country. Besides, it is also planning to explore other Asian and African markets.
Greg Moran, the chief executive officer (CEO) and co-founder of Zoomcar is now one of the veterans in the technology-based mobility space.
Moran, who has been observing the market for a long, however, thinks the business model of Ola and Uber are flawed and they won’t be able to churn money.
In his interview with Business Standard, he added these companies need to revisit their strategy.
He pointed towards the China and Indonesia markets where mobility companies were a proxy for something large. The ride-hailing platforms in these countries are consumer service companies which are servicing everyday needs and not just mobility.
In his opinion, if Ola and Uber do ride-sharing business only, they will never be able to make money.
Moran further explained the ride-sharing firms are offering heavy subsidies to both riders and drivers; there is a huge subvention.
“Whenever you try to become profitable with the driver, there will be a tension. A rideshare driver-based mobility can only become profitable if you eliminate the driver.”
Zoomcar rides on growth model
Zoomcar, however, boasts of strong unit economics. Since its inception in 2013, it claims to have clocked more than 9 lakh trips with a ticket size of about Rs 4,000-6,000 on an average.
During these years, Zoomcar also shifted to a new model called Zoomcar Associate Program (ZAP) for the next round of growth. The program allows people buy cars and lease it to Zoomcar for running it as a self-driven rental car.
The Bengaluru-based company is betting big on the new program. It believes that its ZAP major revenue stream model will help the company achieve its target. Over the next few years, the car rental company is targeting to have a fleet of 25,000 cars for which its ZAP would account 85-90 per cent.