Lowest price doesn’t equal customer loyalty – Gaurav Aggarwal, Savaari Car Rentals

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Savaari home page

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  • Started in 2006 to provide quality rental car services at competitive rates
  • Has a network of 150+ vendors and boasts of over 2 crore trip kms and 15 lakh trip hours to its credit
  • Rasied 2 rounds of funding so far, recently Series B from Intel Capital
  • The car rental market which stands at $ 5 billion is poised to see a steep growth in the coming years
  • Aim to target OTAs (Online Travel Aggregators) in coming months so that people can also avail a cab or taxi while booking their air, bus or train tickets
  • Small cities are big on talent & 9 golden rules for entrepreneur

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Road trips are super fun, but when you do not have a good car or any other alternative- the entire plan can go in vain. Also, not everyone has their very own car to enjoy road trips. Besides that, India certainly lacks reliable Car Rental sources. The ones which are already available range between the extremes- some have extremely high prices and do not cater to the customer timings, the service is bad and often the chauffeurs are extremely misbehaved- all this can indeed ruin any person’s mood. While on the other hand some try and keep their prices very low, resulting in zero maintenance and hence they miserably fail in providing good service to the customers.

Gaurav Aggarwal
Gaurav Aggarwal, Founder and CEO of Savaari Car Rentals.

Gaurav Aggarwal understood all the persisting problems and the need of a good, reliable Car Rental services. Gaurav did his Bachelors in Electronic Engineering from Mumbai University and then went to Georgia Tech, Atlanta to do Masters in Computer Science. He started Savaari in 2006, to provide quality car rental services at competitive rates. They have friendly and efficient staff at their service and all their cars are less than 3 years old, well maintained and driven by chauffeurs who are highly experienced and courteous. Savaari currently has a network of 150+ vendors and boasts of over 2 crore trip kms and 15 lakh trip hours to its credit.

We catched up with Mr. Gaurav Aggarwal, the CEO and Founder of Savaari car Rentals to know more about their venture!

Tell us the idea behind Savaari.  How does the company ensure standards while working across so many local transporters?

[pullquote align=”right”] I soon found out that not only is there a lack of standards and quality assurance in this sector but also there wasn’t any national players. There were franchises of some western companies present but were serving only to a niche segment.[/pullquote]It was in 2006 when I was traveling from Mumbai to Roorkee via Delhi that I found no reliable source to book a car. It was then that I realized the need for a car rental service which is available 24*7 and caters to the needs of travelers is essential. Furthermore, since my childhood days, I have always been fascinated by cars and it furthered me to explore the scope of car rental services in India. This is how Savaari was founded in 2006 with an initial investment of around Rs.55, 000.

The main objective of Savaari is to provide standardization in the car rental industry where 96% of the market is unorganized. Savaari helps in providing transparency on billing, distance travelled and related matters to its passengers and work with vendors who provide quality service. Every car has Savaari chauffeur card, Savaari duty slip and Savaari branded newspaper and water bottles. Savaari provides new, clean and well maintained cars and hires only courteous and experienced chauffeurs who are well acquainted with regional routes.

 Since its Inception in 2006, Savaari has come a long way. Share with us how the journey has been so far.

[pullquote]For me, the most difficult part was to leave the cushy job in US to move back to India and work full time on Savaari. We have come a long way since 2006 and have proved our business and service model is right on track.[/pullquote]It has been an exciting journey so far. The first few years were spent in getting the business and financial model right. The model was that we can provide quality services to our customers on a pan India basis at very reasonable prices and still churn profits. We have been cash flow positive since our second year itself. In March 2012, we have raised our Series A round of funding and this money helped us create awareness about Savaari and its offering to scale and to build the right technology solution to achieve the scale. We recently received the second round of funding from Intel Capital with participation from Inventus. This will be used for further expansion and for deploying advanced technology for the benefit of its customers.  Now, we have grown to an organization of 80 people serving customers in 60 cities across India.

Recently Savaari managed to raise Series B funding from Intel Capital. How do you plan to use those funds?

Savaari plans to utilize it funds for managing and deploying advanced technology for the benefit of its customers. We are also going to increase our workforce by 25%.

 With a lot of competition in this space, how does Savaari ensure to be the best pick for consumers?

[pullquote align=”right”]We are the only car rental company which is present pan-India. Savaari currently has a network of 150+ vendors and boasts of over 2 crore trip kms and 15 lakh trip hours to its credit.[/pullquote]Savaari aims to provide standardization in the car rental industry where 96% of the market is unorganized. We plan to bring transparency to the passengers. Every car has Savaari chauffeur card, Savaari duty slip, Savaari branded newspaper and water bottles. Savaari provides new, clean and well maintained cars and hire only courteous and experienced chauffeurs who are well versed with regional routes. For online safety of customers, the most secure industrial practices for ensuring the privacy of your information are used.

 What do you think of the car rental aggregation industry and how it will shape up in the coming years, provided a lot of car-pooling startups are coming up?

The car rental market is growing at a rate of 15% YoY and has been attracting investments from not only angel investors but venture capitalists as well. This in turn has made the industry a lucrative venture for start-up firms and entrepreneurs. The car rental market which stands at $ 5 billion is poised to see a steep growth in the coming years.

What are your growth and expansion plans in the near future?

In the next 15 months, Savaari plans to expand its services from 60 to 70 cities across India. We aim to target OTAs (Online Travel Aggregators) in coming months so that people can also avail a cab or taxi while booking their air, bus or train tickets. We also plan to deploy advanced technology for the benefit of our customers. We plan to increase our workforce by 25%.

We gather that you have a family background with two generations of transport experience.  Does that help? What would you like to tell people who venture into Industries without any prior experience and network around the domain?

Most important learnings which I would like to tell people who venture into Industries without any prior experience and network around the domain:

1. Lowest price doesn’t equal customer loyalty: It is convenient to price your services the cheapest in the market. But it will not get you loyal customers. In the unorganized car rentals segment, which lacks standardized services and pricing, the challenge is in offering the customer the best value for money.

2. Small cities are big on talent: We have always believed that there are amazing people in smaller cities. This is why our operations and customer support are based in Moradabad and Dehradun respectively. Attrition is zero and operational costs are attractively low.

3. Fund raising is stressful but, keep the faith: It is stressful to raise capital and often takes longer than anticipated. You have to meet more VCs than you would want to and there will be at least a couple that you wish you hadn’t met. But believe in what you are doing and you will certainly meet the right investor who will appreciate what you are trying to do.

4. Build the right culture to manage changing people expectations: The expectations one has from people when the company is five-people strong are very different compared to when it is 100-people strong. When you are just five people, everyone is expected to do everything. As you grow, you need experts focusing on specific things. It becomes very important to build the right culture so that people can adapt to fast changing requirements.

5. Establish a capital efficient model early: We have an a capital efficient culture and operation right from day one. Even when we were proving our business and service model we were cash flow positive. This is an amazing thing to have because you will realize that even when you are funded, the goals that you have to achieve are far bigger than your resources.

6. Entrepreneurship is pervasive: While running a startup, one has to interact with a lot of people, be it for legal or financial advice or to get your office up and running. In fact, even more exciting was to see the entrepreneurial spirit of our vendors. One proof of that, apart from starting, building and growing their business, was their openness and ability to appreciate a new idea like ours and to stick with us and help us grow.

7. The team is and will always be your best resource: Internally, we have seen that a good guy is four times more productive than the average guy. Investing in building the right team pays the highest dividends.

8. Running a startup is a roller-coaster ride: As an entrepreneur, for no tangible reasons, you can feel extreme highs and extreme lows, and sometimes one extreme within moments of the other. It seems strange but it is pretty common.

9. Technology is your most efficient tool: Technology is essential and helps immensely in scaling the company. It also helps in building features to delight customers.

10. Lots and lots of hard work: Being in a startup means tons of hard work and long hours. But, it is also lots of fun.

  • sanjay

    Having disappointing experience with Savaari in quick succession. Two last moment cancellations within a week. Aggarwal should run a Kirana store, not a corporation or go back to his job, running a professional organization is not his cup of tea.