In August this year, car-sharing company Revv raised Rs 100 crore in new funding from Hyundai Motor - automakers are rushing to invest in the future of mobility where people may prefer not to own but just to rent cars. While Uber and Ola have disrupted transportation within cities, companies such as Revv had positioned themselves largely in the leisure use case. Nevertheless, this may be changing soon, co-founders of the company Anupam Agarwal and Karan Jain told Business Today. Here are some excerpts.
1. When Revv started in 2015, it had a fleet of nine cars given out for hourly rentals. Now, the company has a fleet of 1,100 cars across 15 cities. The company, over time, has introduced new products though all of them stay true to the self-driving philosophy.
2. About 70 per cent of its cars are used for leisure (over weekends and extended weekends), and 30 per cent for utility. The hourly rentals range between a few hours to a few days. The company's second product is Switch, a monthly subscription plan where one can rent a car for 1-6 months. The use case was initially for a consumer who would have moved cities and didn't want to invest in a vehicle right away. The founders now say they want to experiment with even longer-term alternatives to car ownership. What if you don't buy a car at all?
3. Revv's differentiation is about convenience. The start-up does doorstep delivery and says it is on time 98 per cent of the time. Globally, car rentals have a fulfilment problem - cars can be returned late by the users, for instance, which affects capacity utilisation. Revv says it has invested in an artificial intelligence-driven technology that tells the probability of delays and the estimated time of returning a vehicle depending on different parameters.
4. The car-sharing sector has its challenges, particularly in India. Most of the start-ups learnt it the hard way. Companies have reported theft of car parts. On one occasion, a user (at a different company) replaced new tyres with old. Rash driving is rife. The result is high insurance rates. Car-sharing companies are therefore putting in technologies to check user behaviour. Revv has a driver alert system that sits on the windshield of the vehicle; the company's accident rates are down by 78 per cent compared to the time it did not have the alert system.
5. Revv currently has a revenue run rate of $10 million and 20,000 monthly customers. With the new funding and expansion, it is targeting a run rate of $100 million over the next 18 months. The founders say that the unit economics of profitability are different for each city - it is operationally profitable in most of the large metros apart from Delhi.