Zoomcar: Constrained by Supply Issues
The chief executive officer of Zoomcar, an Indian car-rental company, had recognized that the costs of vehicle ownership were high for many individuals who needed vehicles only sporadically. The venture capital-funded, entrepreneur-driven business had launched in 2013, gone through three changes in its business model between 2016 and 2019, and identified a gap in the market with adequate demand to be fulfilled. Having adjusted its business model twice to circumvent the issue of supply, in 2020 it believed that it had identified the perfect product-market fit that would solve consumers' concerns over owning versus hiring vehicles. The business's shared-mobility model would allow customers to reduce the total cost of vehicle ownership by offering their vehicles for short-term hires to other users on the Zoomcar platform. Now, it needed to resolve three issues: First, how could it get more cars on the platform? Second, even if it had the cars, how could it get people to adapt to a shared-mobility ecosystem? Third, how could it manage all of this while maintaining viable unit economics and ensuring long-term profitability? Seema Gupta is affiliated with Indian Institute of Management Bangalore.