Team-BHP - Revv's subscription model: Rent a car for 30k/year? Oops, it's actually 25K/month

EDIT on 17th May 2017: The source of this news has corrected their original article from 30K per year to 25K per MONTH. (More details)

Quote:

Car rentals startup Revv is planning to launch a subscription model for renting cars, a first in the industry that will allow users to rent cars for just Rs 30,000 annual subscription.

The company has prepared a war chest for a potential duel with the market leader Zoomcar in this space, a company executive told Moneycontrol.

With an annual subscription plan of Rs 30,000, Revv will provide a user with a car at their disposal 24x7 for as long as they want, at any given instance.

Revv will also allow subscribed users to change the car model up to 12 times in a year between 12 car models currently available – including Maruti Ciaz, Mahindra XUV, Hyundai i10, Honda Amaze, and Ford Ecosport.

The company will take care of the car maintenance, give roadside assistance, and annual insurance.

The aim, says Revv co-founder Anupam Agarwal, is to replace car ownership altogether.

“Private car ownership is inefficient. First, it could be lying idle most of the time. Second, even if you own a car it’s no guarantee that you will drive it to a holiday in the mountains,” he adds.

Funded with USD 9 million from investors such as Edelweiss and Mahindra Finance, the startup has increased its car fleet from 25 to 500 cars within two years of its existence.

The company is aiming to offset the leadership position of Zoomcar in next three years, which has a fleet of over 3,000 cars.

Source

The exact modalities of this subscription are not clear. It would be interesting to see terms & conditions of this. For example, can a subscriber keep the car with him/her for all 365 days, or there will be a max duration per instance clause?

I think it would be more of a "Come and pickup anytime you want" model. One may have to do an advance booking as well, with the duration specified. I say it would be a good thing for frequent renters, but would otherwise be quite expensive if one only needs it about one or two times a year.
Ofcourse, everything would probably be *Subject to availability*. :)

30,000/- per year is actually a very cheap amount to rent out a car - comes to 2500/- per month. Am sure this is not a very straight forward calculation. I'd expect there will be a km based usage fee too, apart from filling one's own fuel. There's no way the company will make money with just the rental in place.

I'd be happy to keep a brand new car with me for 30,000/- per year even if I need to pay per km (provided that's reasonable) and fuel for my usage. However, the moment it's a pick up when you want to use (this should be how it is, so that they can map a number of customers to the same vehicle, without locking it with a single person), the car is sure to be abused and wouldn't leave a good taste when you get if after 6 months or so.

The biggest grouse with the Zoomcars ' are the bad condition most of the cars are in now a days.

I see a lot of 2WD Zoom Cars Scorpios attack beaches on weekend in alleppey, udupi etc and they invariably get stuck in the sand because owners want that 'riding the waves on the beach in their suv' photo with no experience on how to avoid getting stuck in the loose sand and once stuck how exactly to get out of it.

A lot of furious revving later, the vehicles are still stuck in the sand. No wonder then that these cars are heavily abused.

Quote:

The biggest grouse with the Zoomcars ' are the bad condition most of the cars are in now a days.

An interesting paradigm.
If Im honest, given that I drive each of the two cars just for around 12-14km per day when I am in town, I can do perfectly well with no car at all, relying instead on UberX or similar for my needs.
However, there is this thing called 'status' which barges in and makes one go and buy a nice car just because it is 'expected' for you to own one. Then the concept of owning a car just because it provides one with a sense of freedom because one can exercise the option of driving it at any time, is also a factor.
Then on top of these, if one genuinely loves cars, then thats a heart over mind decision.
Frankly if I m able to be rational and clinical, I really should try out this service!

It sounds to good to be true. They have not mentioned the real TnC of this deal. If i can keep the car 24x7 for just 30k a year, what are they getting out of it? And which car do i get for 30k, i believe it would be a Nano/Alto.
And even if they do manage to do it at this price, the first year would be amazing, spick and span cars. But the real test would be the year following that. Because i don't think they'd be able to manage it by selling away cars just after a year

Without the hidden terms & conditions, I would assume the Rs.30k would be the cost only to lease the car, upon which a monthly minimum of Rs.X/km for 500/1000km's would be levied. Nevertheless, it is an interesting idea.

Quote:

Originally Posted by swiftnfurious (Post 4199438)

The biggest grouse with the Zoomcars ' are the bad condition most of the cars are in now a days.

It is probably the reason people are frequently receiving the ZAP(zoomcar associate program) SMS's. It appears Zoomcar is now in a hurry to replace the first fleet of their cars.

There has to be something hidden there. Or are they sinking investor money to increase customer base like Flipkarts & Snapdeals? Or is it 30K for an Alto 800?

If someone can rent me a decently maintained City at 10K/month for a year (fuel extra), I see no reason to own a car.

Quote:

Originally Posted by swiftnfurious (Post 4199438)

The biggest grouse with the Zoomcars ' are the bad condition most of the cars are in now a days.

That's the problem in out country. Other person's property (private or public) is mistreated/misused to no end. Be it a vehicle or a house.

I guess, ₹30,000/- per year would just be the subscription fee. Just like a Jio Prime subscription, you get to rent a car at lower prices compared to what non-subscribers pay. And obviously, you will be charged for damage, mileage overages, etc.,

This is purely a marketing thing, for customer retention. Once you pay for the subscription, you'll be tied to them. You won't be going with their competitors.

too much of VC money floating around -
folks from Japan, China and West looking for the next big market -
enamored by the jazzy presentations in corporate headquarters -
sadly with no hint of profitability, in search of magical success in a future far-far away!

30,000/- rental per-annum for a market where -
------------------------------------------------------------
We can get a license at hometown without ever visiting
Where people rent a car, usually to rip-it-off
Where there are 17 deaths per hour due to road-accidents
Where I can break the rules, knowing fully well that one green currency is all it takes to "settle" things
Where rented auto's run on kerosene

Thanks! As a customer; OFFER GLEEFULLY ACCEPTED!

Sorry to be disdainful, but India still has a long way to go before treating other's property with respect. Till then, you're burning VC money.

Just for a lil bit of context: The guy is ex Partner from a top Strategy Consulting firm, and IIM and NIT pass out. Seems improbable that the guys are a bunch of dumb rookies.

I don't know the business model for this program - but my guess is it is highly unlikely that the business model is not viable...very curious to learn how it works though.

Disclaimer: I am not related to Revv or its founders in any which way, even though we share the same Engg school!

Quote:

Originally Posted by Abhi_Automobile (Post 4199619)

Just for a lil bit of context: The guy is ex Partner from a top Strategy Consulting firm, and IIM and NIT pass out. Seems improbable that the guys are a bunch of dumb rookies.....

Not commenting on people specific to Revv, but most economic disasters aren't created by dumb rookies, quite the opposite.:)

Quote:

Originally Posted by swiftnfurious (Post 4199438)

30,000/- per year is actually a very cheap amount to rent out a car - comes to 2500/- per month. Am sure this is not a very straight forward calculation.

Agree it won't be so simple. Could be like timeshare holidays schemes (Club Mahindra types) where you pay for a year, on need basis book in advance, pay for fuel and/or a fixed charge per km.
Only Rs 30K per year as such does not make business sense to the startup as well as the guys funding this venture.