INDUSTRY ANALYSIS

RENT A CAB INDUSTRY SUMMARY:

MACROECONOMIC LEVEL
The global market for car rental is heavily influenced by the increasing volumes of inbound
and domestic travelers. The rise in the GDP levels, disposable income of consumers, and the
improving road infrastructure are also amongst the key factors behind the growth of this
market. In addition, the significant growth in the business class, particularly in emerging
economies, and the green revolution in the automotive sector are likely to drive this market
further in the near future. However, the negative impact of volatile prices of gasoline and
petroleum products on the consumers spending levels and the economic conditions across the
world is projected to hamper the markets growth over the forthcoming years.
The global car rental market stood at US$87.07 bn in 2015. Rising at a CAGR of 14.40%
between 2014 and 2024, the markets opportunity is likely to increase to US$290.07 bn by
the end of 2024.
Based on the geography, the worldwide car rental market is bifurcated into Latin America,
North America, Europe, the Middle East and Africa, and Asia Pacific. In terms of revenue,
the global market is vastly driven by North America. In 2015, the regional market generated
US$26.40 bn in revenues. Currently, the market for car rentals in North America is highly
concentrated with the significant presence of The Hertz Corp., Enterprise Rent A Car, Avis
Budget Group Inc., and various other regional and domestic enterprises, across the U.S. and
Canada. The Europe market for car rentals, which held the second position in 2015,
demonstrates a comparatively fragmented landscape. In this region, France holds the lead and
is expected to remain seated in this position in the near future.
Over the forthcoming years, even though Europe and North America will continue on their
respective positions, the growth in both the regional markets is likely to slow down due to
their maturing state. On the other hand, Asia Pacific will show a great deal of progress in the
years to come, thanks to the strengthening tourism industry in this region.
Some of the leading players in the global car rental market are Carzonrent, Localiza Rent A
Car, Eco Rent A Car, Al-Futtaim Group, EuropCar, The Hertz Corp., Enterprise Rent A Car,
Sixt Rent A Car, and Avis Budget Group Inc.

MICROECONOMIC LEVEL
Indias car rental industry compares favorably with the rest of the world. With packages
ranging from economy to high-end luxury car hire, the industry in India is gradually
beginning to capitalize on the opportunities in the countrys tourism industry. A high
proportion of the industrys revenues come from low-budget rentals, due to the availability of
cheap labor and the extremely competitive market conditions, and rates are typically much
cheaper than elsewhere in the world. The Indian Car Rental Industry has grown leaps and
bounds over the years due to a rising demand for better and sustainable modes of
transportation among its growing urban population. Driven by a hunger to experience vast
avenues, coupled with an innate fear of missing out on certain opportunities, the millennial
youth of India is gradually becoming the force that is fueling the growth of the car rental
industry. The Indian car rental markets revenue is projected to grow at a considerable
Compound Annual Growth Rate (CAGR) of 35 per cent. Furthermore, this sector is expected
to be worth more than INR 800 billion by 2019, which is quite an encouraging aspect for
market players in this segment. Furthermore, the India car rental market has been categorized
on the basis of geography into North India, South India, East India, and West India. The share
of each region and estimated statistics have been discussed in the scope of the research report.
The tourism industry has been gaining traction in all regions of the country, boosting the
demand for car taxis.Some of the major players operating in the car rental market in India are
Meru Cab, Just Ride, Revv, Savaari, ZoomCar, Ola, Carzonrent, and Uber.

SEGEMENT ANALYSIS:
On the basis of car type, car rental market is divided into MUV cars, SUV cars,
economy cars, executive cars, luxury cars.Economy cars accounted for approximately
33.10% share of the global market in terms of revenue in 2016 due to rising price of
fuel.It is the fastest growing car type in the forecast period with CAGR around 13.73%.
Local usage, airport transport, outstation and others are the different end-users of car
rental service. Car rental for airport transport dominated the global market and
accounted for 41% share of the overall market share in 2016.This is primarily owing
to rising international business activities.
North America is expected to remain the market leader over the forecast period and
accounted for 44.60% share of the global market revenue in 2016. The growing use
of internet and smart technology users in the region is one of the major reasons for
the growth of the car rental market in North America.Rapid industrialization and
tourism industry in emerging economies of Japan, China, and India are expected to
drive the car rental market in Asia Pacific.
Key industry participants include Avis Budget Group, Inc, Sixt Rent-A-Car, Enterprise
Rent-A-Car, The Hertz Corporation, Europcar, Al-Futtaim Group, Carzonrent, Localiza
Rent A Car, and Eco Rent A Car.
CAR TYPE SEGMENT:
Luxury cars
Executive cars
Economy cars
SUV cars
MUV cars

END-USERS SEGMENT:
Local usage
Airport transport
Outstation
Others (Including self-drive, event transportation, employee transportation solutions)
 REGIONAL SEGMENT:
North America
U.S.
Europe
Germany
UK
France
Asia Pacific
China
Japan
India
Latin America
Brazil
Middle-East and Africa

REGULATORY ISSUES
GOVERNMENT POLICY:
In India, road transport is included in the State List of the Seventh Schedule of the Indian
Constitution, thereby placing road transport primarily in the [legislative] domain of State
administration. The Motor Vehicles Act, 1988, a central law that regulates road transport
vehicles, requires specific permits for transport vehicles, and stipulates various conditions
and requirements for holding such permits. In addition, the Act grants state authorities the
power to issue rules regulating taxis. In exercising this power, state governments have
established radio taxi systems, which regulate the operation of traditional radio taxis.
The Information Technology Act, 2000, on the other hand, provides the legal framework for
IT companies, including rules regulating e-commerce and cybercrime.
India does not currently appear to have a national law specifically tailored to regulate digital
aggregators such as Uber; however, attempts to develop one are underway. In mid-October
2015, the countrys Ministry of Road Transport and Highways issued nonbinding
guidelines for states to regulate companies such as Uber and Ola, which identify themselves
as on-demand information technology-based transportation aggregators. In addition, draft
legislation, the Road Transport and Safety Bill, 2015, which is still in its consultation stage,
contains provisions regulating IT-based transportation aggregators, including a statutory
definition of such entities.
The Indian Traffic Laws prohibit any sort of activity that generates direct profit from the use
of a private vehicle This is mostly related to tax evasion crimes, where vehicles with a
registration for commercial use have a different set of tax laws pertaining to them. The
Government can also regulate taxi fares and driver recruitment procedures , or depend upon a
private organization to do so, in case of cab companies. These have yellow license plates with
black numbers.
Cars with black license plates and yellow numbers, that's what rental cars look like. The
distinction is important because in some locations in India, there are large-scale rackets which
try to break this law, and use privately registered cars for rental purposes.
For some reason, the laws for cars and two-wheelers in this regard seem to be different,
because rentable two-wheelers are much more easily available than rentable cars.

INDUSTRY STRUCTURE
To hire a self-drive car, choose a service provider, go to its website or mobile app, register,
upload copies of an identity proof and a valid driving licence. Some companies need credit
card details, while others charge a refundable deposit, usually Rs.5,000-10,000, but is higher
for luxury and premium cars. Letmedrive, for example, charges a deposit of Rs.30,000. All
vehicles are insured. In case of damages, the company may forfeit the deposit. Many also offer
24X7 roadside assistance at many locations. The car is delivered to the user along with the
insurance, registration and pollution check documents.Book as early as possible so that
availability is not a problem.
For every hire, the user has to enter an agreement with the car company. This gives details of
the vehicle, the user, number of days or hours of lease, and other terms and conditions.
Fuel details are also included; usually, the car is given with a full tank, and the user has to
return the vehicle the same way. But this can vary and you can negotiate with the car lease
company. Also, you have to drop the car back at the pick-up point. Check with the company
for the most convenient pick-up and drop points. Cancellation charges apply based on how
soon or late you inform them. If you want the car to be delivered to your house or any location
other than the designated drop points, there may be an extra charge. Payments have to be made
online and before hiring the car. Deposit is refunded to your account after deducting for
damages or maintenance, if any, within 2-3 days. If you exceed the agreed time to return the
car to the delivery point, there is a late fee.

DEMAND DRIVERS
The major drivers of the car rental industry are rising tourist movements, global economic
growth, growth in business activities, and growth in the airline services. Rapid
industrialization and globalization is also expected to fuel the demand of car rental services.
Growing demand of rental cars in developing countries, such as China,
Korea, Brazil, Indonesia, and India, is anticipated to boost the industry. The on-airport
segment is expected to grow at a greater pace than the off-airport segment due to ease of air
connectivity to Tier-I and Tier-II cities in countries, such as China, India, Singapore,
and Dubai. Enterprise Rent-A-Car, Hertz Global Holdings, Inc., and Avis Budget Group Inc.
are some of the major providers of rental services in the car rental industry. The industry
players are going for partnership and strategic alliances with airline companies and travel and
tourism players to meet the constantly changing industry demands of customers.
1. Privacy: Weekends and late evenings are the only times that we get to spend with family
and friends. Imagine the irritation of having an unknown driver snoop over all your
conversations, smirk at your dilemmas, and laugh at your jokes. This gets even worse when
you rent a cab for a tour outside the city spanning a couple of days. And if you are travelling
as a couple, you can see the romance go out the taxi cab window as you wave it goodbye and
say hello to Mr. Driver.

2. Safety: Another driver problem in India is that of safety. Drivers are one of the least paid
and most overworked people in India. So you can be sure that most of the times, your driver
is exhausted, tired and not totally on top of his senses. Apart from that, it is almost a routine
for us to tell a taxi driver not to drive rash , which just goes to prove how much safer you
can be when you are in control of your own self-drive rental.

3. Freedom: Going for a self-drive rental car takes out the fuss and irritation of a trip by
giving you the freedom to be your own boss. You can get out of the house later than you
planned, leave a place early, and stop as and when you please when you are driving your own
rental car. There is absolutely no hurry because you do not have to deal with a running meter
and a driver who needs to be somewhere else the moment he is free of you .

4. Cost Benefits: Apart from all the conveniences of self-drive rental cars, another major plus
point in favour of the self-driven rental vs a cab is the cost. Contrary to the popular belief that
rental cars are costly, Zoomcar in India provides self-drive cars at less than half of what a taxi
or cab company will charge you. For e.g., a self-drive car for 240 km or a whole day is
available for just about Rs. 2300, while even the cheapest cab will charge Rs. 3000 for the
same distance and time.