Car­zon­rent Plans to Skip the Road Taken by Ola and Uber

Co to fo­cus on cor­po­rate car rental and self-drive ven­ture Myles; grow rev­enue to .₹ 5kcr in 3-4 years from .₹ 325cr in FY16

The Economic Times - - Brands: Creating Desire - Sharmistha.M@ times­group.com

New Delhi: Car­zon­rent, which op­er­ates ra­dio cabs ser­vice EasyCabs, said it will not com­pete with taxi-hail­ing ser­vices such as Uber and Ola, but would fo­cus on grow­ing its cor­po­rate car rental busi­ness and self-drive ven­ture Myles over the next 3-4 years.

Ra­jiv Vij, chief ex­ec­u­tive of­fi­cer, Car­zon­rent, said, “We are a profit-mak­ing, com­pli­ant com­pany. We do not want to get into price wars or get in­volved in reg­u­la­tory is­sues. We do not need to go to their turf and fight. We want to grow our rev­enues to .₹ 5,000 crore over the next 3-4 years on a bot­tom-line of about .₹ 600 crore. We want to grow in a sus­tain­able man­ner.” The New Delhi-based com­pany recorded a turnover of around .₹ 325 crore in FY16, said Vij, adding the com­pany is mak­ing prof­its. Car­zon­rent cur­rently has a fleet of 10,000 ve­hi­cles; 2,500 of th­ese be­ing op­er­ated as ra­dio cabs by EasyCabs. The com­pany has chalked out ag­gres­sive plans to grow its fleet to 75,000-80,000 ve­hi­cles over the next 3-4 years.

How­ever, the ex­pan­sion in fleet would pri­mar­ily be for Myles and for the cor­po­rate car rental ven­tures. “Self-drive is the next big op­por­tu­nity for us. Over the next five years, we want to de­velop Myles as an al­ter­nate ur­ban mo­bil­ity plat­form. In In­dia, the av­er­age util­i­sa­tion of a per­sonal ve­hi­cle stands at around 20%, while glob­ally car shar­ing is be­com­ing in­creas­ingly pop­u­lar with 10-25 peo­ple shar­ing a sin­gle ve­hi­cle. With Myles, a consumer need not make a cap­i­tal in­vest­ment to own a ve­hi­cle. He need not go through the has­sle of main­tain­ing, fu­elling and then re­selling his car,” added Vij.

Myles has a fleet of 1,000 cars across 22 cities as of now. The plan is to of­fer the ser­vice with a fleet of 50,000 ve­hi­cles in as many as 50 cities over the next four years. Vij is in talks with in­vestors to raise $20-30 mil­lion to fund the planned ex­pan­sion.

“We are in the process of trans­fer­ring li­cences and hiv­ing off Myles as a sep­a­rate en­tity. This will be com­pleted in the next few weeks. The fresh in­vest­ment will come in im­me­di­ately af­ter that and will be utilised to de­velop tech­nol­ogy, ex­pand mar­ket reach,” Vij said.

Myles, to­day, clocks an av­er­age of 16,000-17,000 rentals ev­ery month. Over­all, Car­zon­rent has reg­is­tered 4 lakh rentals (2 lakh cor­po­rate rentals and 1.5 lakh rentals through EasyCabs).

Around 65% of its rev­enues are from cor­po­rate car rentals, 20% from EasyCabs and the rest from Myles. Though cor­po­rate car rentals would con­tinue to bring in a ma­jor pro­por­tion of the busi­ness go­ing ahead, the con­tri­bu­tion from Myles will go up man­i­fold, said Vij.

The com­pany is also in talks with Mahin­dra & Mahin­dra to put in place charg­ing sta­tions and a ded­i­cated green fleet of 400-500 elec­tric ve­hi­cles.

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