Self-Driving Car Rental Industry has Potential to Flourish. Here's Proof
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With rising Internet penetration and popularity of the gig economy, several companies are focusing on providing products and services on short-term lease. Self-driving car rental space is one such segment which is gaining currency among consumers. According to a report by Ken Research, the Indian car rental market is expected to touch $12.5 billion by 2019, growing at an annual compounded rate of 35%.
At a time when the market is set to grow and develop, cab aggregator Ola is also looking to tap into the market. Bengaluru-headquartered ride-hailing Unicorn Ola launched its self-drive car-sharing service ‘Ola Drive’ last week. According to a company release, the service has been initially rolled out in Bengaluru and will be eventually expanded to Hyderabad, Mumbai and New Delhi. Users will be allowed to book a car of their choice by paying a security deposit starting at INR 2,000.
Why Foray Into Self-Driving Segment?
For the uninitiated, self-driving car rental service allows users to lease a car for a stipulated time after paying rental charges.
Ola aims to have a fleet of 20,000 cars by 2020. “India’s car-sharing market has immense potential and opportunity, which is yet to see a large-scale investment in technology and operations to make the model viable. Our expertise in serving millions of customers through a large fleet of vehicles across 250-plus cities has been instrumental in making ride-hailing a norm in India. Ola Drive has been built on the same DNA and will play a transformative role in defining India’s car-sharing market in the next decade,” said Arun Srinivas, chief sales and marketing officer at Ola.
This development comes after several media reports said Ola was piloting its self-drive car-rental service in Bengaluru and also had plans to invest around $500 million for this service. It was also reported that Ola is sending its senior employees to its self-driving vertical. According to the reports, Ola is also looking to hire more people to manage a fleet of new cars as part of Ola Drive.
What Does It Mean For The Sector?
Ola’s entry into this space puts it into competition with some of the major players such as Zoomcar and Drivezy.
Bengaluru-based Zoomcar which is one of the leading players in the self-driving car rental space has over 10,000 cars in its fleet. Commenting on Ola’s entry in the space, Greg Moran, CEO and co-founder Zoomcar said, “Entry of new players validates the growth of this nascent, fast-growing industry and will expand the self-drive ecosystem in India to eventually benefit more consumers.”