In a country with deep infrastructural challenges, e-mobility in India throws up its own set of complexities. In this interview with Pulse, COO Sudhindra Reddy of Zoomcar talks about how renting electric vehicles brings up knotty, niche problems for technology to solve.
What were some of the transport problems that Zoomcar wanted to set out to solve in India?
India is a very low car ownership market as affordability is still a problem. Availability of capital for a large population is the problem as aspirations are growing. About two generations ago, there was a very high asset ownership kind mindset. That’s completely changing in all aspects.
In mobility it has changed as well, especially with the increasing usage of Ola and Uber for short term mobility needs. So at that point in time, it made a lot of sense to impact this entire industry. We have come a long way in the last 2 years in terms of what sort of business models we are bringing to the fore, especially in how we see the car as an asset and how people get to own, drive and experience it.
Why the desire for rental cars to be electric?
It makes a lot of sense for a shared asset to be electric. Essentially, if you look at Indian electric markets, in essence, the price of the electric car is not even comparable with cars with regular engines. Even after heavy subsidies by the government promoting faster production of these cars, the cost of running electric cars is high. That’s the starting point.
What becomes a detriment is the complete lack of charging infrastructure in India, which means that the kind of cars that are currently on the road, range is a limiting factor. So you can’t do more than 100-250 kilometers with a single charge.
So the model that we bought in and we pivoted to was essentially something called a car subscription, which is very unique to India. Why we started off with this model is because India has particular regulations that separate a commercial car from a personal car.
A commercial car can be driven only by a person who is holding a commercial driving license. Though that has been the language of the law, it still has not been executed widely in India yet. So with all of these regulations in place it’s not as if–like in the US–you would just take any car and start sharing either B2B or commercially. All of this cannot be enabled in India as seamlessly. That’s why it became imperative for us to come up with a subscription model.
We just fire up your app and it is completely flexible for you. The accessibility features and everything to do with the user experience is online and digitized.
How did you go about the problem of the electric charging infrastructure in India?
Let me take the example of Tesla. They picked up the entire mantle of creating this industry and they just moved it faster. In India unfortunately you don’t have any one such player. Car makers in India are saying ‘I’ll just put out these cars and it’s not my problem to solve for the entire industry’. What Zoomcar is bringing to the table is the marketplace of demand for electric cars. This is one angle of it.
On the other side, most of the power distribution companies are trying to play in this sector. There are companies like Power grid and other public sector companies, which have a monopoly of the entire high voltage grid in India. There are private players like Shell and Reliance as well. So there are business conglomerates like this who are trying to play end to end. But all of these still require the cost of the asset ownership to be low. The only way for that to happen is for a player like Zoomcar to enable peer-to-peer sharing of the car and enable only partial ownership of an asset.
What were the changes you needed to make as you began to scale?
Any company which starts off looks for a minimum viable product, which is fairly understandable. In a series-A or Series-B company, you are aiming for velocity to begin with. So you’re going to choose something fast in terms of technology, something like Ruby on Rails, for example. Initially, you don’t have such a large scale as well. That’s how you start off.
What happens while building the company is that the monolith that you have built starts growing larger. You’ll have to take a pause somewhere in between and clear the technical debt that you have. You need to break these into smaller manageable chunks so that you have higher reliability in your systems.
At Zoomcar, we initially started off with a model in which all the assets are owned by us. All of the vehicles are hosted on different parking lots. Any prospective renter would just approach the car at that particular parking lot and take the car off and park it back over there. It becomes technologically a bit more complex and challenging. These are the sort of problems that we face day in and day out.
What’s the key to solving tech problems within IT?
It’s more to do with the complete understanding of the business problem and framing the approach because the talent is available. You could pick whichever technologies you want and you’ll be able to source talent. There’s a cost to it but obviously it’s better than anywhere else in the world in terms of developing the technology over here.
It’s about solving the niche problems. Some of them are very unique to geographies. They might not exist anywhere else, but some of them are very localized problems. For example, if a car is available for X amount of time, it’s exactly like a flight seat or a hotel room. So how do you price it?
The demands are certainly more predictable. But for me the supply and demand is a catch 22 situation. There are a lot of searches that are happening where there are specific pockets of demand areas. But if the supply doesn’t pop up at a point in time. This supply in itself is very dynamic in nature. If you are the subscriber, you can choose at any point in time to share the car.
And while this variability is there in the supply, how do I still capture all that demand? These are the kind of business mosaics and problems we’re trying to overcome.