Short term rental is a new trend across millennials, and the concept has gradually been picking up across the top 10 cities in India. Startups such as Zoomcar, Drivezy and Bounce have been providing self-driven cars and bikes on rent while Rentomojo and furlenco deal in furniture and appliance rental.
Several car makers including Hyundai and Skoda also run yearly subscriptions to cope up with declining sales in passenger vehicles.
Toying along the same lines, India’s first electric scooter manufacturer – Ather Energy has started leasing model to see the scope of leasing for its green scooter brand. And, the company has chosen Chennai to test opportunity in long term rental segment. Interested folks can lease Ather 450 electric scooter at a monthly subscription of Rs 2,230.
The minimum period of leasing is 12 months and it includes all maintenance, insurance, connectivity and software updates with a fully refundable deposit at the end of the contract.
But, why is Ather exploring leasing route?
If you look at scooter market in India, Ather is the most expensive one. Its models – Ather 340 is priced at Rs Rs 1.09 lakh while Ather 450 costs around 1.25 lakh.
“Pricing and performance are key factors that one considers before buying scooter or four-wheel. People who have concerns regarding these parameters would likely to lease,” said a person who is heading subscription vertical at a leading car manufacturer. He requested not to be identified.
Moreover, the mindset towards vehicle purchases has started to change. While traditionally ownership of cars or even bikes were attached to pride, the young generation has been showing decent appetite towards leasing them.
“Since owning a car or bike requires significant investment, leasing gives a viable option to own a vehicle for short and long term rental,” added the above-quoted person. “We are seeing increasing demand of our subscription model in cities such as Bengaluru and Gurugram,” he added.
Ather’s decision to evangelise the leasing model for creating buzz towards green mobility and its brand is a good sign. Nevertheless, it’s yet to be seen whether the Tiger Global-backed hardware startup would tap in attractive result in Chennai so that it can emulate this in other cities.
Remember that leasing business in furniture, automobile, furniture and apparel amongst other segments is in the nascent stage, and limited to three-four cities. Flyrobe is an example. Despite decent backing and execution, the firm has been exploring a merger or a distress deal.
According to Entrackr’s sources, Flyrobe didn’t see the market (aka demand) even after three years (to be checked) of being in business. Will the rental/leasing economy become popular and achieve scale in India? Let’s see how the janta in top 5 cities respond to Ather and other automobile manufacturers’ subscription push over the next 18-24 months.