Zoomcar views potential in partial car ownership venture

Self-drive car-rental service provider Zoomcar added a new dimension to car ownership with the launch of its ‘Zoomcar Associate Programme (ZAP)’ earlier this year. The company, which currently has a fleet of around 2,300 cars across 12 cities, sees the scheme spearheading its expansion in the country and accounting for around 70 percent of its overall vehicle inventory in a year.

“In the next 12 months, we are targeting a fleet size of around 10,000 cars, including 7,000 ZAP cars and the remaining being Zoomcars,” Greg Moran, company CEO and co-founder told Autocar India. He said that they have received 10,000 applications under ZAP so far and close to 500 cars are already on the platform.

The scheme enables individuals to list their cars on the specially made ZAP mobile application and share revenues on a daily, weekly and monthly basis, thereby reducing the cost of acquisition. Much like an Airbnb of cars! However, it does not enlist users currently owning a vehicle due to regulatory issues and requires individuals to purchase vehicles on behalf of Zoomcar.

“Utilisation rates for private cars in India are very low, only 10-20 percent. The idea of ZAP is about being able to leverage that, actually earn money and increase the utilisation rate to 70-80 percent. It enables associates to save on the car’s EMI,” said Moran.

As an added benefit, the associate can get updates about the car’s performance and health warnings, along with updates on which parts need to be addressed while servicing, the company says. This is possible due to a Bluetooth-based hardware tied to the vehicle’s OBD (on board diagnostics) port which monitors parameters such as braking, steering and fuel efficiency among others. In fact, the cost of ownership is also lower since the car has to be registered as a self-driven commercial taxi, which attracts lower registration duty, Moran said. On the flip side, the associate would have to bear the ignominy of having a black and yellow number plate.

Associates under ZAP would have to bear the ignominy of having a black and yellow number plate.

Associates have to list the car on the platform for a minimum of eight hours a month, with no maximum limit. Under the scheme, they are required to take a comprehensive insurance policy for the vehicle, as opposed to a regular Zoomcar rental, where the company bears the insurance.

“The servicing cost is taken care of by the owner, since he’s using the car most of the time. So it’s fair for him to take care of those expenses.  But we provide back-end support via the dealerships and authorised workshops so that the owners can get a considerably better deal. We also negotiate discounts on parts and services,” he said. 

Established in 2013, the start-up recently raised $24 million in its latest round of funding by US carmaker Ford’s newly created ‘smart mobility’ unit, taking the total amount raised since inception to $45 million. The company says part of the funds will be used to further develop the programme and the funding will enable it to reach a fleet size of over 25,000 vehicles across over 25 cities by 2018.