Report on

The Top Three Car Rental Companies In India

Submitted to

Prof. Anant Ram

Prepared by:

Schubert B C Souza 2014257

Siddharth Goel 2014274
Smriti Aggarwal 2014282
Sunil kumar Mehto 2014286

Udayan Bhattacharya 2014309

Vandita Agarwal 2014316

Introduction:
The increasing competition is helping- with new players entering the Indian market, it is
assisting the category to get the long due attention. The industry which moves travelers across
India is moving at a fast pace with new technologies, new business models, demanding
customers, committed service providers are all helping the industry to consolidate amongst
organized players and build Indian brands which can expand beyond the borders of India.

The car rental market in India is booming with the creation of new opportunities as several
international and national companies are entering the market in major cities. These companies
are offering various services to travelers, be it a chauffeur driven car, a special pick up service,
corporate services and much more. The Indian taxi market is pegged at USD 9 billion (Rs 54,000
crore), of which less than 10% is organized. The cab business has emerged as one of the fastest
growing businesses in the Indian transportation sector. In the past, passengers at airports, railway
stations and bus terminals or those wanting transport at odd hours of the day had to depend on
unreliable public taxis, often having to pay much more than the actual rates. The next decade will
witness about 500,000 taxis being replaced and another 500,000 new taxis getting inducted in
major cities.
The Indian Car rental business is growing rapidly at a (CAGR) of around 12% and is expected to
be worth around USD 15 billion within next 5 years with the organized sector having almost
50% of this market. The organized sector differentiates itself from the unorganized sector in
terms of its service parameters such as quality of service, reliability, trained drivers, larger fleet
size, monitored prices, etc. The challenge though, remains to ensure a smooth and consistently
reliable service standard for which fleet upgrade and induction of technology is critical. The
growth of car rental in India has remained consistent and gradual, with organized players
increasingly investing in luxury cars to cater the demands of their customers. Rise in personal
incomes, improved road infrastructure and increased volumes of both inbound and domestic
tourists are the chief factors for growth in rental market.

The next five to ten years will witness a boom in the industry, which will outclass the old players
present in this segment. Owing to this cut throat competition, the car rental companies are going
an extra mile to ensure that every need of the customer is kept in mind. Apart from traditional car
rental companies, there is a lot of direct and indirect competition on the anvil. With variations in
the model of business, entry of new players varies from demarcated fleet to hourly rates to just
being an intermediary connecting drivers with passengers. Some of these players neither own the
vehicles nor maintain them, but only act as a marketplace. However, one will be able to be a long
term player and benefit from operating a substantial fleet with a wide range of options. These
options need to be centric to the needs and wants of the consumer and innovative enough to redefine their choice as well as ground transportation in India.

As a large dynamic country bridging the divide between its million cities, car rental will be the
next engine of growth for the travel in India. And as the direct and indirect competition is
changing the car rental market rapidly, quality and innovation are key factors to help continue
this growth.
The Indian cab market has seen a lot of traction, with over INR 600 crores being raised by the
leading players in the sector. While this has been a very competitive market, the organized sector
forms a small percentage of the overall market. It is estimated that the radio taxi market in India
is $6-9 billion dollars growing at 17-20%. It is also estimated that the number of taxis in the
organized sector will reach 30,000 by 2017.
The sector has in the past few years seen tremendous growth with nearly 10 fairly large
companies operating in various models. But even in this clutter, three companies Ola Cabs, Meru
Cabs & Carzonrent stand out in their product uniqueness, customer service responsiveness,
driver behaviour and timely arrivals.

Ola Cabs
The market made a transition from owned fleet to a fleet aggregator model where anyone could
own a car and become an entrepreneur in fact, Ola Cabs conducted a Driver Mela in Pune and
Bangalore to get vehicles at a discount to potential drivers.

The companys new injection of funding will primarily go to increasing its supply chain that
means more staff for nationwide expansions, and more drivers. Beyond simply signing
drivers up with lucrative offers, the Ola Cabs is focusing on empowering drivers to become
entrepreneurs themselves.
The company works with leading financial institutions that provide loans to help
prospective drivers buy their cars outright, and it also offers training to ensure drivers are
equipped to deliver a quality and safe experience for passengers. The funding will go into
expanding these initiatives into more parts of the country.
Right now, Ola Cabs covers nine cities across India, but the company is aggressively
ambitious and is aiming to be in as many as 25 by the end of the year.

Business Model:
They partner with private taxi owners, provide modern technology and processes for booking,
dispatch and quality assurance. It requires very low capital investment as they dont buy cars.
Private taxi owners also benefit by being able to access aggregated consumer demand across
different services like outstation travel, local transfers and full day/half day rentals.
Revenue Model:
Runs on a pay for performance model. OLA charges a commission in whatever sales they make.
Also to get access to the technology platform, OLA charge taxi owners a small fee.
Starting Up:

Ola cabs started its operations in 2010 from Mumbai under the name of ANI
Technologies Pvt Ltd.

Funding:

Ola Cabs got Angel funded to the tune of ~$1 million (2011), followed by a growth
investment of $5 million by Tiger Global Management. There were follow up
rounds by Tiger and Matrix Venture Partners for $20 million.

Going Mobile:

Ola Cabs launched its Mobile App on Android first, followed by iOS in 2012
followed by Windows in 2014.

Unique Marketing Initiatives:

Ola Cabs provided a lot of promo codes on their website to give huge discounts in
various segments. They also started the trends of providing fixed rate drops to the
airport when they launch in a city.

Ola Cabs provides cabs at INR 13 per kilometre whenever Auto Unions call a strike.

Operations:

Ola so far hasn't run into situations of a strike and that is unlikely given their
model. They have also chanced upon by asking the car owners to employ 2 drivers
per car, thus running the same car almost 24x7.

Financial Viability:

Ola runs risk of not being able to scale up quickly, standardizing and keeping
together different car owners and provides consistent service.

Difference between OLA & other Cab booking companies

OLA cab understood that cash is the most preferred way in India to transact and a
person to talk to on the other end is important to them. A wider choice of
categories, booking modes, payment options etc. makes OLA cabs the preferred
choice for the Indian customer and hence its holds 46% of the market share.

OLAs USP

Providing price transparency.

Give customers a standardized experience across all types of cab requirements be it

local or outstation.

Meru Cabs
Meru cabs began its service in 2006, operating in four metros of the country and has popularized
and boosted the concept of radio cabs. With about 35 per cent of repeat clientele, the company
has been recording a growth of 15 per cent in business every month.

Marketing strategies of Meru CabsMaking the 'taxi' experience more comfortable and secure - Today, Meru operates about
1800 cabs in Mumbai, Hyderabad, Delhi and Bangalore and passengers say that they travel by
'Meru' instead of calling it a 'taxi' because of its emergency security features such as a panic
button are installed in the car along with First-Aid kits in case of any accidents or emergency
situations.
Easy tracking- Whenever we talk about MERU cabs, we talk about their technology which has
played a vital role in MERUs success. All Meru cabs can be tracked from the main control room
to determine their geographical location and ensure a quick response and dispatch. Meru also has
a 'Lost and Found' tracking system in place so that any item left behind unintentionally in a cab
can be traced to the vehicle that the reporting customer has used.
Public carpooling- Meru Cabs is piloting a public carpooling platform in Mumbai, becoming
the first taxi company to venture into a nascent but highly advocated business that could bite into
the cab-aggregation market. Meru, which recently raised $50 million (about Rs. 315 crore) from

investor IVFA, expects to launch the service for private car owners to share rides with others
by September 2015. Larger rival Ola, too, is exploring plans to launch a carpooling service.
Alliance with online mobile commerce platforms- Meru Cabs has partnered with two more
mobile payment service providers, Mobikwik and Paytm, saying it gets more than 70% of its
revenue from bookings done on its mobile application.
Corporate Travel Program- Recently, it has also started a corporate travel program on a test
mode for business clients.
Discount and Offers- Meru cabs provides discount and offers to its customers in different forms
and these are

50% cash back maximum up to INR 100 on 1st payment made through Mobikwik Wallet

on Meru Cabs App

50% off on the fare amount applicable on 1st booking made through Meru Mobile App.
Offer: 50% cash back on 1st payment made via Meru wallet using PayTM. (Maximum
cash back up to INR 100)

Rs 150 /- Off on your first trip booked through App

Rs.150 Off on City to Airport Trips, Coupon Code : AIRPORT150

Advertisement and Promotional activities- For building the brand, the company had started
various ad campaigns and promotional activities. The tag line of Meru - 'Rely on us,' sends out a
message of safety and hassle-free ride on board. It released a radio ad campaign of a small boy
going all alone in Meru to receive his grandmother from the airport. Since last month in Delhi, it
has rolled out the 'Don't drink and drive' promotion to encourage people to call for a Meru
instead of drinking and driving. For this promotion, Meru Cabs identified four TGIF (TGI
Friday's) pubs and 160 restaurants, where it has placed tent cards and utilized their LCD screens
to spread the message. The tent cards carried the message - 'If you find this hard to read, it's time
to book a Meru cab.' In another interesting innovation, color coding was used on coasters.

Easy hiring and customer support- Services like 'Dial-a-Meru', 'SMS-a-Meru' and 'Meru-onthe-Net' are available and customers can avail these services to hire Meru cabs on time. It has
redefined transport sector backed with 24X7 call center and with its trained staff of professional
chauffeurs.
Assistance to drivers- Meru Cabs provides huge assistance to its drivers which is barely
provided by any of its competitors such as, the maintenance of the car is taken care by MERU, it
helps the drivers by providing the booking to drivers through their call centers, the driver is free
to take fares if he doesnt get the fare from the call center and in return the driver provides Rs.
800 to Rs.1050 per day depending on the region to MERU. Whatever the driver earns above
these 800-1050 rupees is his own income.

Issues in Meru cabs

Thats where it all comes unstuck. After six years, Meru is not yet profitable. It has a high
attrition rate within its drivers ranks.
Meru is more of a venture investment. The company had zero revenues when we got in. And
today we have created an entire segment where none existed, says Divya Sehgal, of India Value
Fund, the majority investor. Sehgal handles the Meru investment for the fund.
Those words are true, but so are the following facts. In financial year 2010-11, on a revenue of
Rs 150 crore, Meru made a loss of approximately Rs 45 crore and accumulated losses of
approximately Rs 160 crore.
So what lies beneath the business irony of a great brand that is losing money? Two factors: The
extraordinary rate of expansion and its inability to hold on to drivers.
Out of its fleet of 5,500 cabs across four cities, only 3,500-3,800 cabs are currently operational.

There have been at least three incidents of Meru drivers striking work. Out of every 10 drivers
that sign up with it, at least three quit and join rivals or choose to go back to conventional cabs.
Meru owns all its cabs and treats the driver as a franchisee. The driver hires the car from
Meru for Rs 950-1,250 per day, depending upon the city. Each cab is purchased on loan. So, per
car, Meru spends about Rs 15,000 on EMI, another Rs 15,000 on repair and maintenance, Rs
18,000 on fixed administration services, for a total of Rs 48,000, while it gets only Rs 30,000
(sometimes less) from a driver on a fixed basis every month.
PIL says Meru drivers are being exploited; High Court seeks response
Each driver is required to pay Rs 1,060 per day to the company and in the case of default, he has
to pay a penalty. Moreover, the driver has to work 365 days a year and does not get any leave,
the PIL alleges.
If the drivers violate the agreement, the company blocks their identity card, because of which
they cannot ply the Meru cab. Currently, about 250 drivers have got their ID cards blocked and
thus have lost their jobs

Carzonrent
A pioneer in shaping the personal ground transportation industry in India, Carzonrent (India) Pvt.
Ltd. (CIPL) is India's # 1 personal ground transportation service provider today offering a
complete bouquet of end-to-end long and short term car rental solutions through its fleet of 6500
cars across the country. The company is divided into two verticalsB2B which comprises
corporate clients and B2C which comprises retail car rental and self-drive. Carzonrent also runs a
radio cab service under the brand EasyCabs.
COR" the branding of Carzonrent signifies the fact that Personal Ground Transportation is the
"Core" business of Carzonrent. Carzonrent is perhaps the first and the only player to offer
complete 360 degree solutions to completely transform the Indian personal ground transportation
industry into an organized business.

Ensuring passenger comfort to the minutest detail, Carzonrent has pulled out all stops, from
bringing in the latest technology to setting up 24x7 customer support centers; to bringing
uniformity in operations; to introducing customized solutions for all customer segments, the
company has focused all efforts towards organizing the largely unorganized Indian personal
ground transportation industry.
Car rental firm Carzonrent India Pvt Ltd is betting big on self-drive cars for hire as part of its
strategy to boost its consumer facing business, a top company executive told VCCircle.
Myles
Run by Carzonrent, Myles, the largest player in the self-drive market, is present in 20 cities with
100 locations. Myles, which owns a fleet of 660 cars currently, will expand the fleet to 40,000
cars in the next five years with an investment of Rs 400 crore. Myles will expand the number of
its locations to 300 in six months. Between Mumbai and Pune, Myles will add 50 more locations
in six months from the current five. To address the security concerns, the companies have
installed GPS trackers in cars and conduct identity verification of their customers.

Mahindra and Carzonrent

In a first of its kind endeavor, Mahindra Reva and Carzonrent have joined hands to transform the
on-ground mobility segment in India. In the backdrop of an alarming rate of increase in pollution
and rising fuel prices, this initiative will encourage eco-friendly travel in metropolitan cities. The
tie-up also enhances the Electric Vehicle charging infrastructure in India with over 100 charge
points at prime locations in key cities. Charge points at convenient locations will be availed free
of cost by the customers for Carzonrents Mahindra e2o Self-Drive services. Carzonrent plans to
enhance the availability of Mahindra e2o to expand in multiple locations across the cities.
Though the organized Self-drive market is still small, the demand has been growing
exponentially over the last couple of years with better.
The major strategy of the company to don this was to bring Mobility as a service together,
giving customers an opportunity to realize the endless benefits associated with this innovative
solution. The automatic, wi-fi enabled e2o, with a built-in navigation system will trigger a new
era of convenience. At one third the cost compared to other self-drive cars, the e2o will be a

game changer in the self-drive business model and will provide a complete new experience to
city commuters

Future Improvements

Car maintenance for ola and meru

They should start providing Premium car service for business travelers.
Verification of employees should be carried out to check whether all details provided are

authentic
Referral based drivers so that a chain of good and safe drivers can be formed
Ola needs to pay the drivers incentives and timely payments and the compensation as

compared to the competitors.

The cars of meru have become very old hence the very old cars should be replaced with

newer ones for better customer experience.

Drivers should be trained for communication skills so that is no miscommunication

between the passengers and driver.

The handsets that are being provided do not show the correct route for destinations
Fix location trackers to make it more accurate for pick up and avoid any delays and

finding pick up points.

Adding more vehicles to the fleet so that there is a car available at anytime at any place.
More benefits should be provided to frequent users along with special offers.
Safety should be made the first priority of every traveler and all cars should be traceable

and should be accessible in case of any emergency

Expansion to more tier 1 cities and also tier 2 cities