How does Zoomcar makes money | Zoomcar Business Model

Dev Gupta Dev Gupta
Aug 7, 2021 6 min read
How does Zoomcar makes money | Zoomcar Business Model

Zoomcar is India's first Self-Drive Rental Company. The concept of enjoying a car drive without actually buying a car was fascinating for Indians. Today, Zoomcar has over 10,000 cars in the fleet. It has a market share of 60% and has gained massive popularity. A lot of my friends have rented a car using this service and enjoyed a long drive. There are around 2100+ Rides daily and Zoomcar also has 870000+ Happy users. But, how did this company make so much profit? Let's understand its business model in detail.

What is Zoomcar?
Operating Model and Key Products and Services of Zoomcar
Packages offered by Zoomcar
Target Audience of Zoomcar
Business Model of Zoomcar
What is Unique about Zoomcar's Business Model
Zoomcar Revenue Model
FAQ

What is Zoomcar?

For the people who are living under a rock, using Zoomcar you can rent a car on an hourly, daily, weekly or monthly basis. It was founded in 2013 by Greg Moran and David Back. It is headquartered in Bangalore and currently operates in 45 cities. The tagline of this company is Never Stop Living.

Operating Model and Key Products and Services of Zoomcar

To book a car using Zoomcar you first need to be a Zoomcar member. You also should be 18 years or above. You must have a valid Light Motor Vehicle (Non-Transport) Indian license. If you are an NRI then you should have an international driver’s license. In the past seven years, you shouldn't have any kind of alcohol or drug-related driving violations.

Packages offered by Zoomcar

You can rent a car as per km. If you go beyond that particular km range you need to pay additional money. The rates depend upon the value of the car and also the time period you have rented it for. They offer 3 Packages:

  • Zoom Lite (5 free km/hr)
  • Zoom Classic (10 free km/hr)
  • Zoom XL (15 free km/hr)

Target Audience of Zoomcar

The target audience of Zoomcar is mainly middle-class people between 18-35. They are targeting the people who travel a lot. If we dive deeper they target teenagers and businessmen. Many young YouTubers have promoted Zoomcar. As we know Teenagers follow YouTubers which helped the company to grab a lot of young individuals.


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Business Model of Zoomcar

Zoomcar follows a business model where it buys 75% of the cars on loans from the bank. The remaining are bought on lease from big companies like Avis Budget Group. Now, let's understand other core elements of their business model.

1. Partnerships:

Zoomcar has tied up with various companies to include more cars on their website and to make profits. One of the major partnerships includes Ford & Mahindra. This helped them become the first rental company in India to offer electric cars (Mahindra REVA E2O and Ford's REVA E2O) for rent.

They have also smartly tied up with Tata Motors. This helped them to add 50 brand new Tata Nanos. To secure parking and get pick-up points they have tied up with several hotels, universities, and real estate developers.

In November 2013 they also launched a month-long campaign named RideSmartBLR to spread awareness about Drunk Driving. This campaign was launched in partnership with Uber and the Ashoka Foundation.

2. Additional Benefits:

Apart from Rental services they also give additional benefits which makes them a better option. They are as follows:

  • Mostly the vehicles available on Zoomcar have all India permits.
  • All the vehicles are strategically placed so that customers can pick up the vehicle conveniently.
  • If you want you can also get doorstep delivery of the vehicle.
  • Rates available on Zoomcar have free fuel, taxes, and insurance.
  • Their call centers are open 24/7 to help customers solve their queries.

What is Unique about Zoomcar's Business Model

Today, if I tell you to rent a car you would immediately open Zoomcar's website or app. This shows how much popularity they have gained in these years. But, apart from them, other companies like Drivezy, SelfDrive, U-Drive, Letmedrive, Carzonrent, and LeasePlan offer similar services.

Why they are not so popular? You must have not heard the names of some companies mentioned above. Let's understand what unique things Zoomcar did which helped them to reach such heights.

1. Performance Marketing and CRM:

Zoomcar's marketing strategy is majority focused on Performance Marketing. Meaning that they pay to the marketing companies only when a specific task is completed like sales or getting leads or clicks. To increase repeat transactions the company uses the Customer Relationship Managing (CRM) team.

2. Out of the box Marketing:

Zoomcar has taken a lot of effort to make sure everyone knew about their company. What is the best way to tell people about your company? The answer is the Internet.

Zoomcar used the internet smartly to grow its customer base organically. The company advertises its logo and name on the cars that they provide. Due to which apart from the people who are using the car, others also get to know about the company's presence.

Zoomcar logo on its Cars
Zoomcar logo on its Cars

Their collaboration with FilterCopy, a YouTube Channel helped them gain popularity among the youth.

If you search #zoomcar on Instagram you will see a lot of high-quality images of people using the car and sharing their experience.

Zoomcar Instagram
Zoomcar Instagram

Their amazing services and user experience made the people happy. As you know a satisfied customer does a good job in spreading awareness about the company.


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Zoomcar Revenue Model

Zoomcar Business and Revenue Model are straightforward. They rent you a car according to your preferences and earn out of it. In the financial year 2017-18, their revenue was $19 Million. But, the company was at a loss as their revenue was less than their expenses. To tackle this they launched ZAP Subscribe.

ZAP Subscribe:

This is an interesting program launched by Zoomcar which helps them to make profits. ZAP Subscribe is actually an extension of the previously launched ZAP Program.

Using this program individuals can subscribe to a user or a new car on monthly basis. You can subscribe to a car starting at Rs.18,999 a month. When you are not using the car you can list it on Zoomcar so, others can use it. This will help you to save the subscription fee. The subscription comes up with tenures of 6, 12, 18, and 24 months.

Conclusion

Zoomcar needs to give more benefits to its customers to be in this race for a long time. Their aim, for now, is to grow their business in other parts of the country. They have to give more reasons to their customers to subscribe to a car instead of buying one.

FAQ

When was Zoomcar founded?

Zoomcar was founded in April 2012 by Greg Morgan and David Back.

What is the revenue of Zoomcar?

The revenue of Zoomcar was Rs 294cr in 2020.

Who is the Target Audience of Zoomcar?

The target audience of Zoomcar is mainly middle-class people between 18-35.

What is the market share of Zoomcar?

Zoomcar has a market share of 60%.

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