Rentmycar co-founders bet their stakes to digitise the car rental market.
Rentmycar co-founders bet their stakes to digitise the car rental market.

Need a car for that upcoming wedding in the family? Or looking need a car for two days to finally drive for that long-due retreat beach? No idea who to turn to? Don’t worry! A tech startup from Karachi has you covered.

Rentmycar.pk is an online platform that lets you rent a car for a given time. How? Go to the website, search for the vehicle, enter the city and dates and search for all the available cars. You can then filter by model, self-drive or outstation rentals, among other options. The page also lists down all additional charges that could be applicable, such as delivery/pickup, duration hours etc. A company representative will get back to you and ask for details such as CNIC for verification and then confirm the reservation.

It’s basically an Uber-style, open to all, marketplace that lets car owners list their vehicles which are then rented out to customers. Owners can get an instant estimate of possible earnings by providing a market value of their model along with number of days they are willing to make it available. Currently, the startup is primarily operating in Karachi, along with some presence in Islamabad.

Rentmycar was launched in mid 2017 by Adil Naeem and Faisal Naeem - who owned a small car rental company, Aroma Rentals - along with Kumail Mohib in order to digitise their family business for an extra buck.

“We took inspiration from this American company called Turo and by the time got into the business, Careem had launched by then which quickly convinced people to list their cars online and that made things much easier for us,” the younger brother recalls.

Soon after, they got incubated at the Nest I/O. The team is also flanked by advisers like Muneeb Maayr of Bykea and Faizan Siddiqui of TCS, thus bringing a solid experience in both tech and logistics.

The company has a simple business model: it sources the fleet from car owners and rents it to users through a managed marketplace, charging a margin in the process.

And how do they manage that marketplace? Quite similar to Uber or Careem: owners list their vehicles along with availability for a given rate while consumers are charged based on a pricing algorithm that factors in premiums for variables such as use of chauffeur, outstation travel and season. This gives the startup a better cut than would have been in a peer-to-peer platform.

However, a managed marketplace model in a way betrays the promise of tech to replace the middlemen. A more frictionless way would be giving the power to consumers to directly connect with car owners; in other words, a peer-to-peer platform.

Why didn’t Naeem go for that? “Car rental is high-price transport facility so naturally, the consumers expect better service which is not possible in a free market model,” he reasons.

So far, the startup has been financed by the co-founders through their other businesses, which lets junior Naeem to use not only the office space but also its human resources.

But Adil is now ready to get external investors and is currently in the process of raising a pre-Series A round.

“We will be spending most of that money on marketing to finally put ourselves out there,” he says.

The world across, this model has been tried and tested, including examples such as Fair.com — a California-based company that has raised some $1.5 billion since it was founded three years ago — and the Singaporean Carro with a total $108 million in the kitty.

As far as the local scene is concerned, Roamer from Islamabad is working within car rentals, but with a completely different model.

“They work even point-to-point, operate on short notices and do hour-based as well while we are into longer term and book in advance,” explains Adil.

Apart from the general consumer market that junior Naeem wants to expand, he has his eyes on corporates that often do long-term rentals especially for their relocated executives, instead of buying company-owned vehicles.

“We want to introduce a subscription-based model for B2Bs and cater to that niche,” he says. But that’s not all. There is another segment that has grabbed the attention of Rentmycar: Careem and Uber drivers.

“We have a growing user base of people who rent cars from us and then drive for these ride-hailing companies, thus replacing the traditional contractors,” the CEO adds.

Traditionally, this segment market has been catered by international companies like Hertz and Enterprise for the high-end consumers while local players such as the likes of Vintage and Royal have much of the remaining share. And it is the former that Naeem truly views as his competition.

Logistics is already one of the hottest sectors in Pakistani ecosystem in terms of investments, thanks to the lack of affordable means of transportation in the country. But would that also be the case for a startup that wants to cater to a niche?

“This is a sizeable market, worth more than $100 million, but there is still no transparency or accountability, which makes it ripe for disruption,” Adil concludes.

The writer is member of staff:

m.mutaherkhan@gmail.com

Twitter: @MutaherKhan

Published in Dawn, August 11th, 2019