Switch by Revv cars- India’s first car subscription platform- Reviewed In & out!

2020 Update: Switch model has undergone a change. Check this post for latest ZAP Subscribe vs Revv subscription option. Due to various hidden factors (high tax, lock in period, speed limit and other restrictions,) the subscription model doesn't look very exciting.

I came to know about Switch based on JothiVel Moorthy’s post. I was busy to pay attention to it but finally I did. This post is my review of this new Switch Offering by Revv, as usual I have gone deep into terms and conditions and have highlighted things you should be aware of.

What is Switch?

Switch is a car subscription model. Instead of buying an entire car by paying down payment and EMI, you sign up with Switch and pay a monthly rent for the car. Switch lets you use their cars for the month. You have to pay for fuel, toll, interstate tax etc whereas insurance and maintenance will be taken care by Switch. You can return the car if you don’t need it for a while, you can change cities and car types based on need (subject to various conditions and fees)

How much is the rental?

Varies by car type. Small cars like Swift start at 25000 per month, more expensive duster and Ecosport cost 34000 per month in rental. If you subscribe for yearly scheme, per month rent comes down a bit, but each switch will cost you 2000 Rs.

How does the economics work out?

Below are the numbers, assuming you buy a Swift on 3 years loan vs rent it on Switch platform

	Buying Swift on loan (Swift VDi, ABS)	Renting Swift on Switch (Exact variant and trim not known)
On Road Price	8.5 lakhs
Down Payment	INR 150000 (assumed for calculation purpose)	Zero down payment, 1 month rental payable in advance + 1 month rent deposit
36 month EMI	22000 (@ 9%)	Monthly rental 22000
Insurance expense for 2 years	INR 40000 Approx (1st year already factored in on road price	0
Maintenance cost for 3 years	INR 140000 Approx (service, tyre change etc)	0
Interstate permit fee:	0 (not applicable for white board) Rs 10000, if black n yellow plate vehicle is bought (for ZAP/Angels enrolment, approx, assuming 6 interstate trip per year)	Rs 10000 (Approx, assuming 6 interstate trip per year)
Excess km usage charge:	0	Assuming 10000 km excess usage over 3 years, at Rs 10 per km: Rs 100000
Total Expense	1.5 + (0.22*36)+ 0.4 + 1.4 = 11.3 lakhs	(0.22 lakhs * 36 + 0.1 + 1)= 9 lakhs
Savings	Resale value of 3 year old swift VDI 5.3 lakhs approx. Revenue from Zoomcar ZAP or Myles Angels program: 1 lakh, approx	Assume car is not used for 6 months, hence no rent paid: 22000 * 6= 1.32 lakhs minus switch cost 2000 Rs * 6: Total savings 1.2 lakhs
Net Expense	11.3 -5.3 – 1= 5 lakhs	9-1.2 =7.8 lakhs

Note:

• Down payment, rate of interest, repayment term can alter above calculations. Please use above model and compute for your specific needs.
• Resale value is indicative- can be more or less depending on car model, condition and other factors. On Road price also approximate and varies from city to city
• Accidental damage scenario not considered. Please check Terms and condition carefully
• If you’re not selling at the end of 3 year, at the end of 5 years the rental expense catches up with ownership expense. 5^th year onwards, ownership will be lot cheaper.
• Own car when idle can be deployed on Zoomcar ZAP or Myles Angels program to earn some money
• Numbers like ZAP revenue, excess km usage are hypothetical.
• Interstate transfer of own car not factored- if the car is to be permanently moved to another state, lifetime tax need to be paid again

Let us do same calculation for an expensive car- Ciaz AT, for a 5 year duration

	Buying Ciaz Zeta 1.4 AT on loan	Renting Ciaz AT on Switch (not sure Alpha, Delta or Zeta AT will be issued)
On Road Price	13.5 lakhs
Down Payment	INR 350000 (assumed for calculation purpose)	Zero down payment. 1 month rental payable in advance + 1 month rent deposit
60 month EMI	20000 (@9 % )	Monthly rental 32000
Insurance expense for 4 years	INR 140000 Approx (1st year already factored in on road price	0
Maintenance cost for 5 years	INR 500000 Approx (service, tyre change, minor damage repair etc)	0
Interstate permit fee:	0 (not applicable for white board)	Rs 20000 (Approx, assuming 6-10 interstate trip per year)
Excess km usage charge:	0	Assuming 20000 km excess usage over 5 years, at Rs 15 per km: Rs 300000
Total Expense	3.5 + (0.2*60)+ 1.4 + 5 = 21.9 lakhs	(0.32 lakhs * 60) + 0.2 + 3= 22.4 lakhs
Savings	Resale value of 5 year old Ciaz 7 lakhs approx. Revenue from Zoomcar ZAP or Myles Angels program: 2 lakh, approx	Assume car is not used for 12 months, hence no rent paid: 32000 * 12= 3.84 lakhs minus switch cost 2000Rs *12: Total savings 3.6 lakhs
Net Expense	21.9-7-2= 12.9 lakhs	22.4-3.6= 18.8 lakhs

Obviously, the Switch platform will not help you save much on long run. It is not an alternative to car purchase if you are likely to stay in a state for several years. It is beneficial to those looking  for a car for short duration or convenience & flexibility, or those who are likely to change cars or states at regular intervals.

Let us do one more comparison- renting on daily basis vs monthly

	Ecosport, Daily rental from Revv	Renting Ecosport on Switch
Usage	Weekends only, 3 weekends a month for 6 months= 36 days
Daily rent for 36 days, Revv	6222 per weekend 48 hours, 240 kms/day package + 300 delivery charges each time 1.17 lakhs for 18 weekends, 8640 kms usage limit	6 month rent @ 34000 a month = 204000 , 15000 kms
Excess km charges	(Assuming 10000 kms  total usage) Rs 13600 for excess km
Fuel	Extra at actual	Extra at actual
Total	1.3 lakhs	2.04 lakhs
Per day avg cost	Rs 3630 (36 days only)	Rs 1335 (can use for full 180 days)

Unless you need the car for every day, renting on daily basis might be cheaper for pure weekend trips.

What is the difference between Revv-Switch vs Zoomcar ZAP or Myles Angels? 
While under Switch you don't own the car but rent it on need basis, ZAP and Angels work the opposite- you own the car but when not in use, car will be deployed on Zoomcar/Myles fleet and you get to earn a share of the revenue it generates.

Is Switch really useful? Yes and No. Read on.

Pros and cons of Switch Subscription model vs normal car ownership 

Switch Advantages over owning a car

1 No need to pay huge down payment

2 No worry about insurance, maintenance

3 Ability to switch off subscription and save when not in town or when car is not needed

4 Can change car types and cities

Switch Disadvantages over owning a car

1 End of loan term you own the car which will have some resale value

2 No usage limit, speed limit (2500 kms per month, 125kmph with Switch, can’t go to Ladakh etc)

3 Own car can be customised at will

4 Variant, safety feature and condition of Switch car can’t be predicted.

5 Own car can be deployed on ZoomCar ZAP or Myles Angels program to earn some revenue
6. If you're the owner, you can get exemption from toll booth near your home. Not possible for a rented car.

One month normal rental of a Figo Aspire costs around 73000 with Zoomcar, but includes 3500kms usage and fuel. (assuming fuel costs around 13000, Zoomcar monthly rental can be nearly twice as expensive as Switch monthly subscription. 

To whom Switch subscription model is useful?

1. To those who visit a city for a month or two and need a car at disposal. Buying a car and taking it to another state is a pain. You’ve to pay lifetime tax again. Again, if the need is only home-office, you should consider if Ola/Uber is cheaper and practical. Switch rental averages to about Rs 1000 a day, which is more than enough for two rides on Ola/Uber (say home to office and back)
2. Families who need an additional car but only for short term or have a small car and need an SUV for short term- like when guests are visiting, family functions etc
3. Expats/rich customers who don’t like the headache of maintenance etc and need a car at disposal along with flexibility to move between cities on need basis
4. Those who spend several months away from home- they can switch off (not pay rent/EMI) for months they are spending away
5. Those who would like to change cars very often- you can try different car every one or two month

Points to remember about Switch car subscription model.

1) 2500 kms usage limit per month: This is biggest hidden limit and is way too less for serious users. Beyond 2500 kms  a month, an additional per km fee will be charged, which I guess will be around Rs 10-15 (not very sure) per excess km, apart from fuel cost which anyway renter has to fill.  2500kms a month averages to 83 kms per day. Consider few scenarios

Scenario 1: Home to office: 15 kms one way: This means 30kms a day for 20 days (600 kms), assume 200 kms of other within city drive during weekdays (total 800 kms). This leaves 1700 kms for 4 weekends, or 425 kms per weekend. Chennai-Bengaluru weekend drive will be 700kms, Bengaluru-Goa is 1200 kms. If you are a serious user making long trips even 2 weekends a month, you will exhaust the limit and will have to pay extra.

If your home to office/weekday usage is more, even less kms will be left for weekend use.,

Scenario 2: Month long South India trip: If you’ve planned a week long or month long trip, you will exhaust monthly limit within 1 week flat. Say you begin from Chennai, drive to Kanyakumari via Pondy, Madurai, then to Kerala, then to Karnataka, Goa, back to Bengaluru and Chennai- This will be easily 3000kms on highway + another 1000kms for various diversions/additional exploration you will do.

2) Poor flexibility in switching On/Off: Unless you can plan your month well in advance, you will end up paying unnecessarily. Consider below situations

Sudden business trips: Your monthly rental will be charged upfront. 2 days later, you are asked to go abroad by your company for 3 weeks, almost immediately. Now you can’t switch off the subscription as this month has already been charged. You can ask for switch off anytime, but need to inform 7 days in advance, but switch off will be done only by end of the month. Waste of rental amount. Lots of time business travel and other things change so fast, we won’t have 7 days planning window. When you switch ON, it is not clear if you will be billed from next month or same month.. Like if you switch ON on say 20^th of June, my guess is you will be charged for full month, not a prorated 10 days rent. (Happy to correct if I am wrong)

An ideal solution would have been to offer a prorated rental- daily or at least weekly. So that customers can subscribe for few days or few weeks only based on their need, instead of having to pay for one full month for just a few days usage.

3) Speed limit: 125 kmph top speed. Rs 750 penalty for initial breach, repeat violators will be kicked out of the program

4) Every user who drives the car should be registered with Switch. If you allow some unregistered user to drive and car crashes, you will have to pay for entire damage.

5) Variant of cars and conditions: It is not clear which variant of cars will be provided. Usually rental companies buy cheaper variants. There's lots of difference between Swift Lxi vs Swift ZDI+. Cheapest variant is 6 lakhs, most expensive variant is about 8.5-9 lakhs. Cheaper variants usually miss lots of safety features (ABS, Airbags) and comfort features (Climate control, navigation, more speakers, better infotainment system, reverse camera, power windows for all doors etc). When renting for a day or two I can live with a cheaper variant but when subscribing for months, I would like to know the variant details. Most cars I had rented from Revv were lower/mid variants. Read my Revv related posts: Ford Aspire Photoshoot * Review * Day out with Honda City * Audi Q3 *

6) Condition of the car can be a subject of contention. Though Switch is promising new cars with less than 20k kms, I don't think that is viable forever. 20k kms will be used up within 6 months and it won't be economical to sell and buy new cars after each 20k kms usage. There will be cars with more usage. The term 'Good Condition' is very subjective. For example, four tyres with different thread pattern/uneven wear is "bad condition" for me. Not sure if the delivery guy agrees to it or even if he agrees, will he have authority and budget to change the tyres or give a replacement/upgrade? There should be some assurance that Switch will provide a no questions asked replacement car or an upgrade within few days if customer is not happy with the car assigned.

My wishlist for Switch by Revv are as below:
- Provision to charge on prorate daily or at least weekly basis if we switch on/off middle of the month and not charge for full month
-Specify which variant of each car will be offered (like ZDI, VDI or LDI etc)
-Assurance that a replacement/upgrade will be given within few days at no extra cost if customer is NOT happy with the condition of the car issued
-Relax Monthly usage limit from 2500 to at least 5000 kms, call out what will be excess km charge.
-Yearly plan should ideally include at least 3-4 free switches... 

Update: Revv's twitter team has responded that Variant detail will be known but may vary from city to city. For other wishlist items suggestion was to sign up and speak to Switch team.

Conclusion: Overall it is a good concept to offer, despite some of the limitations listed above. We should give people alternative to owning cars, so that traffic conditions in cities improve. I am sure a fair number of people will find it tempting, as entry barrier is low and there's reasonable flexibility. However depending on individual's usage and need the economics may or may not work out. There're lots of terms and conditions carefully inserted to protect interests of the company, not much for protecting customer's interests. Feel free to try it out for a month of two if it appears tempting, but exercise some caution if you're thinking of yearly rentals. All the best.

Disclaimer: All information as available on Switch website at the time of composing this post. Numbers for car purchase cost comparison taken from public domain. Pricing, terms and other information are subject to change over time and w.r.t specific car type. Please cross check and use your discretion/due diligence.

Also check: BMW Operational and commercial lease program * Audi Bullet Scheme * ZAP by Zoomcar *  Self drive car rental- Myles vs zoomcar vs Revv comparison  *