Transforming the car rental business - Savaari | SupportBiz
Sign in | Register |Follow us on

Vertical View

Transforming the car rental business - Savaari

The car rentals market in India is extremely competitive and highly scattered. The industry is dominated by the unorganized segment. But this market is on a threshold of a change. ‘Savaari Car Rentals’, with a direct presence in 60 cities, is making an impact across India by maintaining uniformity in customer experience.

“No matter whether you hire a car through us, in Jhansi or Mumbai, you will get the same services at reasonable prices,” said Gaurav Agarwal, founder and CEO, Savaari Car Rentals. Edited excerpts of the interivew:

What are the challenges in the car rentals business?

Around 96 percent market share of this industry is captured by the unorganized sector. There is no standardization on quality of service provided to the customer. There is no uniformity in prices. Almost all car rental vendors are present in one city and there are no pan-India players. This is a major challenge for the industry.

The self-driven car rental market is yet to catch up in India. Bad traffic; not so good roads; and low driver salaries are the bottlenecks here.

Please share your initial experience in incepting the business.

It was in 2006 when I was traveling from Mumbai to Delhi and had to go to Roorkee, UP. But after reaching Delhi, I found no reliable option to book a car. This is when I realized the need for a reliable car rental service that should be available on a 24×7 basis. Customer must be assured of a clean, fully functioning car and an informed courteous driver. I decided to analyse the scope of the future of car rentals in India and soon found that there is no standard and quality assurance in this sector and that there are no national players. There are franchises of some western companies present in the market but they are targeting a niche segment. This is how Savaari was founded in 2006 with an initial investment of around Rs.55,000.

How has business been so far?

It has been an exciting business journey so far. The first few years were spent in getting the business and financial model right. The biggest growth driver for us is our commitment towards providing the best service to our customers across India at reasonable prices. We turned cash positive since our second year.

In March, we raised funds, a series A round of funding, and the money will help us market brand Savaari; and build the right technology solution to achieve scale.

We now have an experience of around one crore kms across India and our revenue from corporate and retail customers is divided into a 60:40 ratio. We have over 500 active corporate customers.

Did you raise initial capital for your business?

It was a couple of lakhs was used to register the company, build the website and start basic operations.

What is the market outreach plan ? What are your expansion plans?

We operate in 60 cities across India and have 150+ garage locations in these cities. We will be adding 10 - 12 cities in the next three to four quarters.

How do you foresee the next two years of your business?

The primary goal for the next two years is to scale our business by creating the right awareness about Savaari and the advantages that we bring to both corporate and retail customers. We are also building technology solutions which will help us scale and provide customers with better services and convenience.