Zoomcar will launch a chauffeur-driven cab rental service in Bengaluru, a major city in southern India, to explore opportunities in a broader transportation market segment. This move follows the departure of co-founder Greg Moran, who stepped down as CEO earlier this year after leading the company for over a decade, during which it went public in the United States.
Entering a market dominated by established players like Ola and Uber, which primarily focus on ride-hailing but also provide cab rentals, Zoomcar faces strong competition. The company plans to offer rental options ranging from two hours to over a month, targeting the growing demand for vehicles with drivers, a shift from its current self-drive rental model.
“If we look at the market in India, most of the market is always coming with drivers. So that is actually bigger for sure,” CEO Hiroshi Nishijima said in an interview.
Earlier this year, Zoomcar withdrew from international markets, citing a funding shortfall and high marketing expenses required for expansion beyond its home base in India.
In November, the company disclosed significant concerns about its ability to continue operations due to ongoing losses and the need for additional funding to address debt and working capital requirements.
The new cab rental service will be accessible through the Zoomcar app, allowing customers to select specific cars rather than from broader vehicle categories. The company will utilize an aggregation model, partnering with car owners and drivers to reduce costs associated with owning assets and employing staff.
Zoomcar does not plan to use cash-burning strategies such as offering steep discounts and incentives to compete in the cab rental space. Instead, the service will be competitively priced, according to the CEO.
CEO Paul Nishijima said the company is raising funds, which it intends to use for debt repayment, covering monthly losses, and supporting growth initiatives.
Zoomcar’s entry into the cab rental market represents a strategic pivot as the company seeks to navigate financial challenges and expand its service offerings. By leveraging an asset-light aggregation model and focusing on competitive pricing rather than aggressive discounting, Zoomcar aims to carve out a niche in a competitive space dominated by established players like Ola and Uber.
While the company faces hurdles, including raising funds and addressing operational losses, this new venture could provide a pathway to stabilize its financial position and tap into a broader market.
