Change in travel scenario with Savaari Car Rentals
Every cloud has a silver lining. We’ve all heard that age old pearl of wisdom, but it rang true for Gaurav Aggarwal, Founder and CEO of Savaari Car Rentals. After enduring one of those gruelling transport misadventures for which India has gained notoriety, Aggarwal was prompted to become an agent of change and of travel with car rentals (www.savaari.com).
In 2006 while planning a long distance trip from Mumbai to Delhi and Roorkee, Aggarwal chose to rent a car; to his dismay there were no reliable options for doing so. In the midst of this unpleasant experience, he realized that people need a reliable car rental service that is available 24/7 and provides the customer with a clean, fully functional vehicle operated by an informed,courteous driver. Upon delving further into the matter and analyzing India’s car rental dilemma, Aggarwal soon found a gross lack of standards and quality assurance in the sector, but not without noticing the absence of national players as well. While franchises of western companies had established their presence, they were catering only to a niche segment. This proved a boon to Aggarwal, as it gave him plenty of space and opportunity to create Savaari Car Rentals with an initial investment of Rs. 55,000.
Gaurav Aggarwal has a Masters in Computer Science from Georgia Tech and has spent ten years working for a networking company in the Bay area. He was previously involved in router development. He says the experience of working in such a complex environment enabled him to design a completely customized and scalable back-end for Savaari from scratch. The family background of two generations in the transport industry also helped him in evolving the business and service model. Aggarwal recently received the Star Young Entrepreneur Award at the 6th Indira International Innovation Summit in Pune.
Co-founders Manik Shah, Mohit Khanna and Rahul Khanna also bring entrepreneurial and customer support experience to Savaari. Savaari Car Rental currently provides rental service at competitive rates in 60 Indian cities. In the front end of the business, the customer interacts only with Savaari from booking to billing. However, the company has brought local vendors on board to assist with back end operations. Commenting on this, Aggarwal said, “At the back end, for reasons like the local context that is required in running these kinds of businesses and to have asset light model, we aggregate local vendors to provide services to our customers. We have set high standards on who can join our network. We use the local vendors as building blocks and have built processes on top to control the customer experience with the car and ensure that they get the same quality each time and in any of the 60 cities that we provide our services in.”
Elaborating on pricing, he added, “We agree on rates with our vendors which are very competitive and then add our mark-up based on many things like our costs, demand and supply within that city, competitive landscape. These are the rates that our customers pay us and we in turn pay the vendors based on the agreed upon rates.”
Aggarwal cited funding and interactions with venture capitalists as some of the initial speed bumps he encountered along the way. “Raising money is always stressful and often takes longer than what you wish it should take. I had to meet more VCs than I wanted to and there were at least a couple that I wish I hadn’t met. But it is the belief that we were fixing a big pain point that kept us going and eventually we met the right investors who were very appreciative of what we were doing. I had put in the initial amount of money to get started. Apart from the issues that you face when you start a new venture, there weren’t any other major ones.”
Though the company does not own a fleet of cars at the moment, Aggarwal says that Savaari’s focus on reliability, safety and competitive rates is what sets it apart. He said, “Unlike typical aggregators that are present in the market, Savaari owns the customer experience from the start,from booking to billing the customer and Savaari has built the right processes to be able to do that. Thus, we are a car rental company to the customer even though at the backend we do not own cars and aggregate vendors in the 60 cities that we are present in. We have strict criteria for vendors to join our network including the one where they have to be in this business for at least 10 years.”
Commenting on women’s safety, he added, “We take the safety of our customers, especially women, very seriously. We have built an android app so that we can track the car and driver at all times. Also, in almost all cases Savaari drivers work for around 10 -12 hours a day compared to other drivers, including the radio cab drivers, who generally work for over 16 hours a day which causes fatigue and puts the customer at risk.”
When asked about plans to raise money, Aggarwal commented, “We have been cash flow positive since our second year. In March 2012, we have raised our series A round of funding of Rs. 5 crore ($1 million) from Inventus Capital Partners and this money will help us create awareness about Savaari and its offering to scale and build the right technology solutions.”
Despite his accomplishments, Aggarwal was rather modest when asked to comment on the company’s success, saying, “We have started extremely well, achieved many milestones on our way to achieving this goal. In the next few years we will certainly achieve this goal and become India’s biggest car rental company and at this we will consider ourselves successful.” While Savaari’s services are readily available to the general public, the company is gaining popularity with India Inc. as its number of large corporate customers is steadily increasing.
According to Aggarwal, Savaari has added Aditya Birla Group, McDonalds, BSE, Mckinsey, Ernst and Young, Hypercity, Cannon and Konica Minolta to its growing list of clients. Looking to the future, he said, “The primary goal for the next two years is to scale our business by creating right awareness about Savaari and the advantages that we bring to both our corporate and retail customers. We are also building technology solutions which will help us scale and provide our customers with even better service and convenience.”