Arpan leads the Product Management and User Experience Design teams at Zoomcar. His team is responsible for building industry-first experiences across Zoomcar’s Renter, Subscription, Operations, IoT and B2B product lines. Arpan comes with 8 years of product experience in the consumer internet space, primarily in the e-commerce and classifieds spaces.
The rental car industry has witnessed a boom in recent years and is poised for even more robust growth in the coming quarters. The industry has always enjoyed a loyal customer base with repeat customers contributing to as much as 80% of the business. However, in the pandemic affected the world, the industry is attracting a whole new segment of customers. As safety and social distancing become primary concerns, customers are likely to stay away from public transport and ride-hailing. Personal mobility solutions offered by rentals ensure safety, sanitization and on-demand convenience. Rental and subscription cars are the perfect choices for enjoying the comfort and convenience of an automobile without actually having to bear significant down payments or getting stuck with never-ending EMIs.
There are a few trends which will define the trajectory of the industry in the coming years.
Use of AI-based Solutions
There are multiple areas where AI-powered solutions are proving to be game-changers for the industry. The most basic ones are obviously the distance and location of cars. On-board sensors enable real-time tracking and send billions of data points to the cloud about the vehicle and its parts. AI-driven algorithms help optimize routes and ensure optimum inventory allocations to match the local demand hotspots. Even minute optimizations can have significant implications for the profit margins of the vehicles. AI Integration also provides real-time monitoring of the vehicle irrespective of its location. The gradual wear and tear of parts like batteries, clutches, engines etc which are not visible to the naked eye, can be pinpointed and even predicted by AI-powered systems.
The data points being emitted from the vehicle can even help determine instances of rash driving like fast accelerations and harsh braking. Brands in the industry can complete the loop by nudging customers towards better driving behaviour or identifying the root-cause of damages and levying punitive maintenance charges to be borne by the driver.
Subscription-based services are likely to completely upend the traditional ownership model for vehicles. There are a few distinct user segments for which car subscriptions are proving to be ideal: i) young urban professionals who don’t want to commit to long-term asset ownership ii) families looking for a second car for commutes and errands iii) 2-wheeler owners who cannot afford a big down payment or do not want to get stuck with EMIs.
Subscription packages are now being offered for multiple vehicle categories and with flexible durations ranging from 1 month to 36 months. Subscriptions open up an opportunity for an entirely new segment of people for whom car ownership would have traditionally been out of reach. These are also ideal for customers who want to keep their options open and even switch cars seamlessly as their use-cases change. Flexible pricing and the ability to reduce monthly fees by sharing the car back for short-term rentals make subscriptions an unbeatable proposition.
Demand from Local Tourism
The demand for rental cars was already increasing from airports, hotels and tourist spots. Major airports are now integrating with rental services to provide a seamless pick-up and drop-off experience for tourists as well as business travellers. The second biggest integration point is with hotels.
As tourism use-cases slowly limp back to normalcy after COVID, the focus will shift to micro-tourism e.g. families and friends visiting local attractions in a 200 km radius. Long-distance and international travel is likely to remain subdued for at least a year. In this context, a sanitized personal car is the safest option for travellers. It ensures near zero risks of exposure to a driver or hundreds of passengers on a train or flight.
Always Connected Car
Connectivity is central to the Rental Car Industry with the integration of AI and IoT. Rental services use tech-led connectivity to improve route prediction and to cut operating costs. It also enables a diagnostic environment that reports any malfunction in the vehicle. Seamless reporting of errors can help to predict asset damage and ensure passenger safety.
E-mobility and an eco-friendly future
A clear trend that we are likely to see in the next few years will be a shift towards electric vehicles. There are already clear signs of fleet operators opting for e-mobility owing to its lower running and maintenance costs. Government support in terms of the regulatory framework, subsidies and ramp-up of the charging infrastructure will likely accelerate the trend towards e-mobility.
The car rental industry will inevitably be a catalyst for a green revolution. Most car drivers will likely get their first taste of electric vehicles (or hear word-of-mouth) through car rental and subscription services. Within a decade we can all look forward to cleaner air in our cities, lesser noise pollution and overall lesser service and maintenance costs.
The concept of car rentals is not new, but the best days of the industry are still ahead of it. People are gravitating towards subscriptions as the concept of ownership increasingly becomes antiquated. A new generation of customers aspiring for a car is increasingly realizing the futility of buying a vehicle outright that is idle 90% of the time, depreciates in value and brings no earning potential. The idea of part ownership, part sharing will likely be the defining model for personal mobility in the next decade.
More about Arpan Srivastava
He has previously worked as a Product Manager and Lead at Myntra, Amazon and Naukri.com. His experience encompasses a range of products like growth funnels, user-generated content, recommendations, cataloging systems and two-sided marketplaces. At Myntra, Arpan and his team were responsible for building category-specific product representation and launching Myntra’s Personal Care selling experience. He also built Myntra’s fashion-focussed user-generated content product from scratch and revamped product recommendations.
Arpan is passionate about building products which customers love and enjoy daily. He considers his primary job to be to inspire Product Managers to build inspiring products.