Zooming Ahead: UAE-Headquartered Finalrentals Is Looking To Make A Dent In How Traditional Car Rentals Work
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
"When you run a startup that you started with roughly AED15,000 as operating capital, it is important to do things differently!” This is how Ammar Akhtar, CEO and co-founder of Dubai-based car rentals startup Finalrentals characterizes his entrepreneurial trajectory.
Launched in 2016, Finalrentals was created to address some specific loopholes in the traditional car rental industry that Akhtar had spotted thanks to his decade-long experience in the sector. His own personal journey in the car rental industry began in 2006, when he moved to the UAE from Pakistan in search of better opportunities. Soon after, he landed himself a role as the Chief Software Architect to build a website and an online car rental booking system for Dubai-based car rental firm Budget Rent a Car. This was a move that, he says, inspired him to believe that “I didn’t choose the industry, but the industry chose me.” He adds, “I realized that this could be my niche.”
His job at Budget Rent a Car resulted in Akhtar’s many more stints making web booking platforms for over 100 car rental companies across the globe, including UAE-based car rental firms, such as Thrifty, Dollar, and Payless. “While working on those projects, I was lucky to get exclusive access to the industry,” he recalls. “I am a very curious person, and I always liked learning about new things, and this attitude helped me understand the ins and outs of the car rental industry from procurement, to operations, to sale, to pricing, to the rental agreements.”
But even after spending numerous years in the industry, Akhtar was not personally convinced that the traditional car rental model had fully evolved into a wholesome experience for the final customer. “In over 11-12 years of this experience, there was a storm brewing inside me,” remarks Akhtar. “The car rental companies do a lot, they have hundreds of employees and locations, and plenty of cars and resources, but the digital user experience almost never transpired from digital to the real thing when they received the car. The customers always complained about less transparency and hidden charges during online booking. I could see that no matter how awesome the tech built by me was, the user experience was going nowhere.”
Image courtesy: Finalrentals
With an impressive stock of industry knowledge under his belt, and a vision to create something more holistic in its approach, Akhtar launched Finalrentals in December 2016 with a very small amount to boast as capital and absolutely no funding. “I started it with AED32,000, and after licensing and other costs, the net operating capital I had in my hands at the time of launching Finalrentals was AED15,000, to be exact,” recalls Akhtar. “I was coming from my software architect background, working as a leader of engineering and design teams, and knew very little about startups and funding. We are a very lean organization by design. We do not work on high cash flow, we don’t rely on any kind of loan or debt, and 100% of our revenues are in real time.”
Operating on the basis of a commission-based model, and with access to over 400 locations and 98,000 vehicles across the UAE, Finalrentals offers car rentals from top car rental companies in the UAE on a daily, weekly, or monthly basis, and with free delivery to the customer’s doorstep. “Our business model is totally based on commission on every transaction,” explains Akhtar. “We earn roughly around 5-15% on every transaction that happens on Finalrentals, and that obviously depends on the model and supply/demand metrics fueled by the dynamic of car pricing that runs in the background. It also creates a fantastic comparison visual for our users, because they can compare the prices of the cars from many different companies under one umbrella based on their preferred location and car rental dates.”
Interestingly, the move not to raise funds was not a planned one initially, but now, it is a completely voluntary decision, says Akhtar. “It was not intentional to not raise funds then, but today it is intentional, and we are a very stable tech startup as Finalrentals is 100% bootstrapped till date and growing!” On the surface, the business model seems to be as straightforward as it gets with a car rental firm. But Akhtar emphasizes that there is a major differentiating factor at Finalrentals. “The main USP of Finalrentals is that we do not run it like any other aggregator,” he says. “It is our deep tech integration that helps you get the best price with transparent terms and conditions (the Final in the company name comes from that vision), and the whole process is digital through web and app interfaces.”
When asked what “deep tech integration” entails, Akhtar impresses with his appraisal of the methodology used at Finalrentals. “If you check online, it is possible that you will never see an ad of Finalrentals anywhere,” he says. “We try not to spend on advertisements as we cannot afford to, so 100% of our revenues comes from organic traffic. We have created a deep tech layered module that we call ‘SEO DIP,’ and that was invented by me during the early days of Finalrentals. SEO DIP helps with ranking pages on Google more effectively, and we target long tail keywords, intelligently. So, for example, if you go to Google and search “rent a car in Karama,” or “rent a car in Dubai Mall,’ it is possible you will find Finalrentals appearing on the first page of search results.”
Akhtar’s own innovation, therefore, has helped the firm remain profitable over the years despite the lack of funding and a very limited budget on marketing. “This combination of ‘price married with search engine visibility’ is our USP, and the tech is learning itself and maturing on a daily basis thanks to AI,” he says. The core aim for Akhtar, as the Finalrentals website mentions, is to make “car rentals as easy as ordering food.” But as was the case for businesses across the globe, the COVID-19 pandemic put a brake to Finalrentals’ operations just as they were planning to speed ahead. “It was tough for us,” he recalls. “From March 2020 till August 2020 almost, all car rental locations were closed due to the on-and-off lockdowns, and because car rentals is considered as a non-essential sector. I have to admit that for the first couple of weeks, I had no idea what to do, it was all blurry. But then composure prevailed, and I told my team that we are not letting anyone go. Let’s focus on our product, and make it better!”
Image courtesy: Finalrentals
This focus towards better product development resulted in the launch of a door-to-door car delivery system, and the launch of a booking engine called BLADE, which is aimed at making non-stop bookings available via Finalrentals. “We call it BLADE, because it is as cutting edge as tech can be,” adds Akhtar. Consequently, despite having to revise its initial growth predictions, Finalrentals was able to exceed its targets in 2020 through some quick pivots- the startup was able to gain 1.5 times more “car rental days” as compared to 2019.
But the pandemic also brought to the forefront one very significant loophole in traditional car rental models- the growing irrelevance of fixed locations. “I see a lot of automation where a customer can tap and collect the car from their pinned location- this concept is already there in the car sharing business model, but traditional car rentals are still far behind,” says Akhtar. “Internally, we are working on a technology called Finalrentals Air that will bring the keyless car collection anywhere the customer wants by just unlocking the car from the app. It will be available in the late spring of 2021.”
A new app isn’t the only project in the pipelines for Akhtar and his team. In addition to expanding further into the region, particularly Saudi Arabia and Qatar, the firm will also be setting up a presence in the EU with the opening of a Finalrentals office in Poland. With all this to look forward to, it is unsurprising to know that Akhtar’s goals for the future of Finalrentals aren’t restricted by geography. “My dream is to make Finalrentals the largest car rental ecosystem in the world,” he remarks. “With the marketplace working really well in the UAE, we are now on the move to take it to the global level.”