Business Opportunity- Premium Service in Self Drive car rentals

Self Drive car rental market in India is getting crowded. Big cities like Bengaluru n Delhi have about a dozen operators now offering cars. (Zoomcar, Myles, Revv, Royal Brothers, Driven, Volercars, Avis, Divezy,  Autoriders, vroomdrive etc etc). For companies in this business it has become a  volume game to get more n more customers and keep the cars on the road for longer duration to make profit. What this means is that attention to detail, quality of service and personalized attention is almost impossible. Every third customer has some complaints or problems with his/her bookings, but for companies trying to solve this customer’s problem is less interesting/beneficial compared to prospect of acquiring 2 new customers. So while more n more people now embrace the idea of renting a self drive cars, a fair percentage is disappointed at the drop in quality levels of the service.

So what can self drive car rental companies do? My suggestion would be to launch a premium service wing, in line with Amazon Prime for online shopping or Premium Economy in flights. A promise of better service for a small premium price. Here’s how and what of it.

Expected features in the premium self drive rental offering

• Dedicated customer care without IVR or relationship manager (so that one can easily speak to a human in case of a problem instead of complicated menu)
• Top end variants of the cars
• Dedicated and qualified mechanic to ensure cars are in great condition after each rental
• Door delivery if asked by the customer
• Give better details about the car assigned(such as variant, odometer reading, how old it is, key features like 4x4 etc) so that customer can make right choice
• Better Loyalty scheme that rewards accident free usage, on time return etc
• Unique and High end cars not easily available hence has high aspirational value (Example Ford Mustang, Porsche, Discovery Sport etc)
• Relaxed rules w.r.t speed limit, kms usage etc. (These are qualified and experienced customers who are paying a premium, trust them a bit and let them experience the trip/drive without having to worry about a dozen things.
• A well defined compensation policy in case of service deficiencies (guaranteed upgrade if booked car is not available or cash compensation for delay in delivery or if vehicle condition is not satisfactory etc) with a clearly defined escalation matrix.

 Advantages for self drive companies by launching such a service:

Build a high end clientele who can pay premium price for premium service: For many of the popular self drive companies, the volume game is the only way to profitability- add more cars, give more discounts, get more bookings and so on. This has greatly reduced the attention staff can give to a car or a customer. Many customers complain about poor quality of cars, delays in delivery and other service quality issues. Probability of getting a car with worn out tyres or risk of facing a delay when there’s a time critical meeting to attend etc often puts of premium customers who would have otherwise booked the self drive car. A premium service with 99.99% reliability and quality will get these customers hooked.

Additional revenue: Too much competition in budget segment and margin are under pressure trying to outsmart the competition. The premium service if launched, will bring additional revenue sources

Ability to distinguish from the competition: There’re a dozen self drive companies in a city now and customer is spoilt from choice. If he has to be loyal to your brand what’s unique about you?

Also it is important to define some eligibility criteria while rolling out premium scheme for self drive cars. Few checkpoints like “At least 10 normal rentals without accidents” or Driving license 3 years or older, or “Only for those who’ve been a regular member for over 1 year and have taken at least 10 bookings” etc. This helps eliminate the crowd, brings in quality customers who can be better trusted with the cars and some sort of exclusivity and premium feel.

What do you think of it? Would you sign up if any of the leading self drive companies launch a premium service? Let us see who launches it first.