Analysis of Service Operations at Zoomcar

Submitted in partial fulfilment of the requirements of the course

Service Operations Management (SOM)

Instructor: Prof. N Ravichandran

Academic Associate: Moxanki Bhavsar

Submitted on March 16, 2018 by

Ankit Jain
Guddi Nihil Charan Reddy
Harsimran Singh
Nayan Bansal
Prachi Sahu
Rachita Sharma
Table of Contents

INTRODUCTION................................................................................................................................. 3
HOW ZOOMCAR WORKS ................................................................................................................ 3
UNIQUE FEATURES .......................................................................................................................... 3
ZOOMCAR’S BUSINESS MODEL ................................................................................................... 4
CURRENT SERVICES OFFERED .................................................................................................... 4
AREAS OF IMPROVEMENT IN SERVICE OPERATIONS ......................................................... 5
RECOMMENDATIONS TO IMPROVE THE SERVICES ............................................................ 6
Exhibit .................................................................................................................................................... 7

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 INTRODUCTION

Zoomcar is a self-drive car rental service that saves the cost and hassle of owning a car while
giving all the benefits - convenience, mobility and independence.

Zoomcar is India’s first online car rental company launched in 2013 in Bangalore, India. In
India where companies focused on chauffeur-driven rentals, Zoomcar came up with this new
Idea of self-drive car rentals in India. The company operates a fleet of over 3,000 vehicles in
23 cities across the country. Zoomcar has a 30 lakh+ customer base. The company plans to
expand in 20+ countries in 2-3 years.

HOW ZOOMCAR WORKS

Upload
Book Unlock Zoom Return
License

1. Search for and book a car on Zoomcar’s website (www.zoomcar.com) or their mobile
application.
2. Upload your driver’s license, and pay a small security deposit.
3. Zoomcar will then SMS the car details to the customer 20 minutes before pickup. The
customers can unlock the car via the Zoomcar app.
4. Customers then have to fill the start checklist in the Zoomcar app and grab the keys
from the glove-box and drive.
5. After the completion of the ride, the customer returns the car to the same location and
fill the end checklist to end the trip.

UNIQUE FEATURES

Prices Include Free Fuel
No extra charges paid for fuel. In
case of extra fuel requirement, the
amount is refunded after the
receipt in shown
Rent by the Hour, Day, Week,
or Month
The length of the car usage
can be freely chosen by the
user
Doorstep delivery
Availability of vehicles in
multiple locations

Range of cars: SUV, Luxury, Book weeks or minutes before Cars have All India-Permit
Sedan pickup All cars have All India Permit
Variety of cars available for Speedy availability of Zoomcar at
pickup the time of3requirement
 ZOOMCAR’S BUSINESS MODEL

Car rentals Car purchase/ Lease

ZoomCar provides cars on rent on hourly, daily,
weekly or monthly basis. They take huge range of
cars on lease right from Swift, City, Eco sport,
Fortuner, Ford Figo and Honda Amaze to BMW 3
series and Mercedes-Benz A-Class sedans.
ZoomCar buys 75% of the cars in its networks
through loans from banks and remaining are
leased from large companies. They also Started
an initiative where individuals invest in cars and
get into a 30-month Lease Agreement with
ZoomCar to lease the car to them. This Initiative
is called ZAP.

Delivering Value Proposition to

Customers and Car Rental Owners

Revenue Generation Customers

ZoomCar takes 30% cut of the revenue earned
from the car, against all the business, and for all
the operational support that ZoomCar will
provide.
For now, ZoomCar’s audience has been restricted
to mainly tier-1 and tier-2 metros in India. They
have opted for an approach of maintaining a very
hyperlocal and dense network in existing cities,
rather than going far and wide.

CURRENT SERVICES OFFERED

Zoomcar Associate Programme (ZAP)

In April 2017, Zoomcar introduced its Zoomcar Associate Programme (ZAP) which allows
individuals to put their cars up for rent to the start up when not in use. Only those buying new
cars can register for the programme.

So far, it has received over 7,000 registrations and Moran said ZAP will account for 75
percent of the fleet size by 2017.

There is a new subscription model under ZAP, its flagship fractional sharing program where
one can subscribe to a car on a monthly basis and technically have the flexibility of having
new car whenever you want. The subscription model will help introduce additional
flexibility and convenience for individuals while also providing easier access to a vehicle.

PEDL – New Service by Zoomcar

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First of its kind in India, PEDL includes real-time GPS tracking, solar battery charging and
built-in alarms. It is designed to complement ZoomCar’s existing business, PEDL reportedly
offers cycles at multiple pickup points across various neighbourhoods in a city.

The process of using the service is also quite simple - walk up to a PEDL location, pay via
PayTm and drop it off later at any of the PEDL locations. According to the press release, the
cycles are priced at Rs 10 per half an hour.
As per the company, PEDL cycles come with unique features including custom designed
aluminium alloy frames and drum brakes, anti-slip chains, airless solid tyres and height
adjustable seats. 'These cycles are designed to support 24 + months of intensive use while
ensuring industry low maintenance costs and extremely high levels of customer satisfaction,'
the release further stated. The cycles are also reportedly built with smart locks which are
easily unlocked using a QR Code.

HOP – One-way Intercity Self Drive

Zoomcar’ s new one-way intercity self-service allows a customer to travel from point A to
point B which will enable customers to pick up a car from Zoomcar location from one city
and drop it off to another city at a Zoomcar location. The launch of one-way intercity launch
adds flexibility and options to people’s travel plans.

This provides whole new level of convenience for the 20 lakhs plus Zoomcar customer base.
The product offering caters to a wide range of point to point, inter-city self-drive use cases.
Strong demand is anticipated for Hop from both business and leisure travellers.

AREAS OF IMPROVEMENT IN SERVICE OPERATIONS

We conducted interviews with representatives from Zoomcar, Ahmedabad office, regarding

the challenges they face in their operations. Detailed questionnaire of the same is in Exhibit.
Important highlight of the issues raised by them are:

 Securing vehicle post time limit

Some customers don’t drop off the vehicles at the required location or do so beyond the
time limit which causes problem for the next scheduled trip. One specific instance
highlighted was, when customers rent a car for Ahmedabad airport and don’t pick up
call from Zoomcar. This causes problem for the next scheduled trip of that car for
which Zoomcar has to arrange alternate vehicle.

 Customer Defaults
Zoomcar’s public perception is usually evaluated based on the rating/customer
feedback given post the services are utilized. The feedback provided is often bad by
angry customers who have been charged penalties by Zoomcar. Customers refuse to
pay the rash driving and speeding ticket penalties imposed on them. Penalties for
smoking and drinking inside the car also receive the same reaction. Even though all
possible penalty description and rates are mentioned on the website, customers refuse

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 to pay and vent out their anger at poor services in customer feedback. Sometimes legal
action has to be taken against the customers who add-on to its bad image.

 Vehicle utilization
Ahmedabad office faces twice the demand during weekends and holidays than on
weekdays. Zoomcar maintains enough cars to manage the peak demand, but this creates
under-utilization on weekdays when demand is low. As per the management team, the
cars can be unutilized in their parking space for as long as one day. Given the cars are
not used for any other purpose, it creates a high opportunity cost for the vehicles.

To understand customers’ perspective on Zoomcar’s service operations and the issues faced
by them we interacted with a few of their regular customer who provided the following insights.

 Customer to customer services

There is a high chance of dispute in the customer to customer model of Zoomcar, where
the private vehicles are put on rent and are directly handed to customers without the
mediation of Zoomcar. Users of this service have raised concerns of false accusations
made by the owners on lines of scratches or damage to the car and hence the demand
for penalties. This uncertainty is an issue for both the parties involved. Lack of proper
protocol in this service aggravates this issue.

 Difficult to locate cars

The self-pickup points of Zoomcar are usually parking lots where customers have to
pick up the vehicles. Due to the absence of any Zoomcar official at that location, it is
difficult for customers to locate the car. This activity consumers a lot of time of the
customer as they have to traverse the entire parking lot searching for their vehicle. This
problem has been on the rise as the number of cars deployed by Zoomcar has increased
as a part of their service expansion.

 Extra penalty charged

Customers often feel over charged for penalties. Even though the penalty regulations
are available, there is a lot of subjectivity concerning the extent of damage and the
corresponding penalty charged. There is also a lack of formal process to contest the
charges imposed and any pushback on the part of customers leads to Zoomcar
blacklisting them.

Majority of customers were appreciative of the fact that Zoomcar sends out a warning to
them (in the form of an SMS) whenever the speed exceeds 120 km/hr. They also mentioned
that the Zoomcar app is user-friendly and easy to navigate.

RECOMMENDATIONS TO IMPROVE THE SERVICES

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Establishing presence in college
By creating foothold and strong awareness among college students and also highlighting its
environmental and social benefits of car sharing, it can tap the student community which is part
of the new generation of self-service economy that fits nicely to Zoomcar’s self-service model.
By experiencing with Zoomcar’s concept and car sharing service, high loyalty will ensure that
those students would continue to use car-sharing as an alternative to car ownerships.

Zoomcar Zones
Create Zoomcar zones where only Zoomcar vehicles are parked. This will reduce the search
time for customers. An informative display screen can be added indicating the position of all
the cars aiding the customers to traverse the parking lot. This can be made self-sufficient by
customers updating the system with the identification code of the parking space where the
vehicle is parked.

Improving customer services

Increasing transparency in penalties charged can help customers understand Zoomcar’s
policies better. Incentivizing the customers to follow the company’s rules can help reduce
violations and maintain vehicles’ condition. Incentives can be in the form of discount on future
rides or coupon codes with partner associations like Paytm. Surprising the regular customers
with promotional offer can increase loyalty.

Increase vehicle utilization

For increasing weekday usage, Zoomcar should try to attract private business organization to
use its fleet for employee transportation instead of using employee’s own cars. Also, as
pressures mount for reduced fuel consumption and car-usage, the concept can provide a viable
and unique long-term solution

Exhibit

Exhibit1: Guiding questions for information sought from Zoomcar’s executives at the
Satellite office in Ahmedabad*
1. Overall operations
2. Number of cars per city - how is demand predicted for various types of cars?
3. What is daily demand?
4. Number of Pickup and drop locations
5. Number of employees per location
6. Operational issues faced every day (+ Car damage/ repair issues)
7. Types of customer complaints received
8. What do they do in case of customer default?
9. Capacity utilization issues?
*Due to request for maintaining confidentiality by the executives, only inferences from the answers to the above
questions, and not the direct answers have been mentioned in this report