How Local Car Rental Vendors Are Upgrading Their Business Via Technology

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In the past couple of years, the Car rental segment in India has managed to gain steady growth mainly due to a shifting trend from car ownership to renting cars, especially among the millennial population. Driven by an innate need to explore their surroundings, the next generation of Indian consumers have begun to look for alternate means of transport that can fulfil their travel goals without burning a hole in their pockets.


According to a 2014 report in Indian Brand Equity Foundation (IBEF), the Indiancar rental market holds immense potential to grow due tosudden entry of several international and national companies in the market in major metro cities, creating new opportunities for development with each passing day. As stated in the report, the car rental business in the country was estimated to grow at a CAGR of over 12 per cent during that fiscal year. In addition, the report also postulated that this market will be worth more than USD 15 Billion in the next five years, i.e. by 2019, with the organized sector enjoying a market share of up to 50 per cent.

While the unorganized sector still enjoys a fair share in the car rental market, the biggest differentiator between the organized and unorganized segment was found to be in terms of service parameters like quality of service, reliability, trained drivers, larger fleet size, and monitored prices.

The UnorganizedCar rental market in India

Ever since tech-enabled On-demand car rental aggregators forayed into the Indian market, they revolutionized the way Indian people travel from one place to another without having to worry about incurring extra expenses. With pre-fixed rate cards, registered vehicles, and insurance facilities, travelling via car rentals is becoming the norm in the country.

Inspired by this trend, the unorganized car rental spacehas begun to transform itself to stay afloat in the market. Local car rental vendors are now moving up the ladder by integrating technology within their businesses, and are putting their vehicles on aggregator platforms to expand their business revenues.

Similar to on-demand car rental services, local car rental service vendorsare now offering various facilities like pick-up services, chauffeur driven cars, route suggestions, etc. to their customers with an aim to maximize their business reach to a wider consumer spectrum. With technology as an enabler, conventional car rental vendors are tirelessly marketing themselves to be at par with the organized car rental space. What's more, driven by a startup friendly ecosystem and entrepreneurial zeal, many individuals are now beginning to buy cars to become entrepreneurs within this space.

Upgrading the Traditional Car Rental space

According to some industry experts, the Indian taxi market is estimatedto be more than USD 9 billion (Rs 54,000 crore), of which less than 10 per cent is organized.Over the years, car rental services have emerged as one of the fastest growing businesses in the Indian subcontinent. With changing times, it has become a matter of utmost importance for this industry to upgrade its operations, at least in the unorganized space by utilizing comprehensive technology for better business growth.

With technology, many local car rental vendors have been able to fulfil various aspects of their business, like upgrading the Business model. As previously mentioned, adoption of technology has enabled many car rental vendors to modify and upgrade their business model to enable smooth running of their business, without any hassle. Additionally, making room for tech-based automation has resulted in enabling better business management, and consequently, more scope for scalability. Use of technology by local vendors has also proven to be a boon for better logistics support and ground transport management, creating little to no scope for error on either the vendor's or customer's side.


Technological advancement has become the biggest growth driver of many industries, especially the automobile and transport industry that have benefitted immensely from the same. While tech-based car rental services are expected to continue their upward growth trajectory, it can be safely concluded for now that local vendors will continue to adopt technology for greater business scalability &sustainability; creating an organized ecosystem in the Indian car rental space that benefits all involved.