Meet the startup that’s looking to be the Zipcar of India: Zoom

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.

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