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Summary:

A year-old startup aiming to be the Zipcar of India — Zoom — now has 50 cars in Bangalore being rented by the hour and day.

Zoom India

Car sharing is becoming a way of life for many young city dwellers in places like San Francisco, New York and Paris – where the parking sucks, the traffic is heavy and the cost of car ownership is high. But will the cities of India be interested in the car-as-a-service model, too?

The entrepreneurs behind the year-old startup called Zoom think so, and earlier this year they launched a car-sharing service in Bangalore, India. Zoom co-founder and CEO Greg Moran — a former cleantech investor — tells me via email that the company now has 42 vehicles in four different locations across the city (and one of those cars is an electric Reva).

Zoom India

By January of next year, Moran hopes to have 150 vehicles at 15 to 20 locations throughout Bangalore, and potentially move into New Delhi and Mumbai after that. The on-demand car service has only been operating for about 6 months, and the launch and operations have been funded by $650,000 from New York-based Empire Angels, and a group of investors in the UK, which includes Lady Barbara Judge, as well as Larry Summers. Needless to say, they’re just starting out

But, as Forbes points out, India does have a $3 billion rental car market, and anyone who’s spent time in India’s large metro areas like Mumbai and New Delhi know the traffic can be intense. Parking is also extremely difficult in cities like Mumbai. There’s unarguably a lot of demand for people to get from A to B without owning a car, which you can see inherent in India’s common rickshaw system.

However, India is a rather different market than the U.S. or Europe, when it comes to launching and maintaining a startup. For starters, it’s still got a lot of corruption in the business world, which could make getting and monitoring parking spaces difficult for a group of young entrepreneurs, as well as navigating India’s insurance industry. Roads and driving are also a little hairy in India, which I could imagine could make the cost of the upkeep of the cars high (or perhaps the customer would be more accepting of slightly more banged-up, dirtier cars).

The Zipcar model — where the company owns and maintains the cars — can also be a difficult one for a startup because the cost of ownership of the cars can get high. It took Zipcar over a decade to break even and start generating a profit. Even then, the company was sold to Avis, which has deeper pockets to run such a centralized system.

Zoom costs between $3.50 to $4 per hour (or up to $15 per hour for a really high end car), or around $50 a day. So it’s not necessarily super cheap, and that will cut out a lot of the potential market. But that’s probably how much they have to charge right now to cover their costs.

India does have a growing middle to upper-middle class that has some disposable income, and university students of well-off families might be a hot market to start out (at one point the Tata Nano was targeting this group). We’ll check back in with Zoom down the road and see how much they’ve expanded.

Updated at 11:53 PST to reflect the most recent funding at $650,000 and new investors.

  1. Hehehe…..$3.5 to $4 per hour in India $50 per day…hehehe…..

    You can get chauffeur driven taxi in $15-$20 for 8 hour (i.e. $2 per hour)…and you know 80 km free ride is included in that……you must have checked ground reality with OM Malik before putting nice story about them so that they can get more VC dollars. If still have doubt search on google with Keyword 8 hour 80 km in google.co.in.

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    1. Please check the ground reality before commenting. Let me highlight some points :-
      1. You can hire zoomcars by hour and don’t have to pay for extra hours like you do with normal taxis.
      2. Daily limit of using zoomcar is 200kms, much more than 80kms for normal taxis.
      3. After 10 hours rent remains the same for the next 14 hours. You have to pay extra to the normal taxis beyond 8 hours.

      In short zoom is cheaper for short duration and long duration. Only time it will be expensive is when you are using the taxi between 6-8 hours. The other advantage is the better cars zoom have. Not to mention that you can actually sit one more guy in the car because there is no chauffeur here.

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  2. I see how nicely you skipped the cost of fuel in your comment…BTW you can have package for 4 hours 40Km also….. There are lots of statistics here but no static on how many bookings they have per day.

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    1. The cost of fuel is fully covered in every Zoom reservation. Even if a member refuels during the reservation, that cost is fully reimbursed to the member. Zoom has been fully booked out every weekend since launch (27 straight weekends). Demand is incredibly robust………

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  3. i know of a company in India which is launching a rental scheme for two wheelers where they pay 50INR for 80Kms of travel. Do you think that this would have scope ?

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