Ola's self-drive car rental service begins operations in Bengaluru

Going horizontal and offering aligned services around the core product is the natural extension of most of the large consumer Internet companies. Flipkart, Paytm, OYO and Ola have encapsulated several products/services around their core products to keep growing and achieve scale.

Ola has also been moving in the same direction with its horizontal aspiration in surface transport space. It enables several mobility services such as on-demand cab, bike, auto-electric rickshaw hailing services and outstation taxis bookings. 

Adding another use-case, Ola has launched self-drive rental service in Bengaluru. Several team members of Entrackr, along with other Ola users in the city, have been able to use ‘Self-Drive Bookings’ feature without any glitch.

The service has come after six months of internal preparation by the SoftBank-backed company. In March this year, Ola confirmed that it has a significant interest in self-drive car rental space with a plan to invest up to $500 million in leasing and subscription verticals.

The Self-Drive Booking feature provides models of several brands including Maruti, Hyundai, Tata among and can be picked from Garuda Mall and Forum Mall (Koramangala), Ashok Nagar, ITPL et al. Ola is charging about Rs 444 for two hours if you choose Swift Dezire while Xcent and Grandi10 cots Rs 362 and 314 respectively (refer below screenshots). 

Importantly, we tried booking self-drive cars on the app in Mumbai, Delhi and Lucknow but couldn't find the service.

It's worth noting that the option isn’t active for all Ola users in Bengaluru but likely to open for all in the next two-three weeks. Besides offering self-drive service to its users, Bhavish Agarwal-led firm has plans to bundle subscription and long-term leasing to corporates. 

According to media reports, the company plans to have a fleet of 10,000 select car models for self-drive, corporate leasing and subscription. It’s also engaged in talks with luxury carmakers - Audi, Mercedes and BMW to include luxury cars in Ola’s fleet by paying a monthly subscription.

Ola self-drive rentals service is cheaper and flexible (one can rent even for 2 hours) as compared to Zoomcar and Drivezy.

The self-drive rental service by Ola would impact two major incumbents - Zoomcar and Drivezy along with Revv and Myles. Zoomcar claims to have a fleet of 7,000 vehicles with 2 million customers. Drivezy fleet size is estimated to be in the range of 3,500 to 4,000 (excluding bikes).

Over the past three-four years, the concept of self-drive cars has been catching on in India with millennial class opting rental over owning, especially when it comes to big purchases - cars, furniture and large appliances. The trend is anticipated to have a wider adoption in the coming years.

The bullishness on the segment could be ascertained by the heightened interest of SoftBank in the space. Drivezy reportedly held talks with the world's largest investment fund for a three-digit financing round. 

Ola has an advantage over Drivezy and Zoomcar because of its brand value, trust and frequent usages by commuters in metros as well as smaller cities. The firm already had committed $500 million for driving self-drive, leasing and subscription business, which means it won’t mind splurging for market share. 

Ola’s push for the self-drive rental is likely to heighten competition and trigger consolidation. Only two months and a half ago, Drivezy and Zoomcar held talks for an equal merger deal. Chances of such collaboration increases if Ola gains enough traction in the coming months.

Entrackr's query to Ola did not elicit a response till the time of publishing this report.