Zoomcar ZAP Subscribe-fine print explained!

Zoomcar is promoting its ZAP Subscribe feature, currently operational in Bengaluru and few other big cities. While their official website does a good job of explaining the program, many of my friends who heard of the program were still not clear how exactly it works. Thus I decided to draft this post, giving overview of ZAP Subscribe program in plain English terms, focusing on areas one should be aware as a customer. While most publications ran official press release as is, projecting ZAP Subscribe as a great alternative to buying a car, a detailed analysis of their policy, terms and pricing doesn't look really promising. Below is my detailed analysis of ZAP Subscribe program

Quick Summary of Pros and cons of Zoomcar ZAP Subscribe
Major Cons
No need for huge initial spending- can have a car for 22k per month onwards. Ideal if you need car for few months only
Maintenance coverage limited to Rs 0.75 per km, excludes tyres. Possibly huge maintenance liability on subscriber in worst case scenario like major repairs
Possibility to earn some money when car is not in use, by listing on Zoomcar
Subscriber has to open his/her home as Zoomcar location and work as fleet executive (clean the car, fill fuel, handle delivery/collection etc)
Maintenance covered (but only to a limited extent)
Subscriber is responsible for usage and maintenance even when cause could be the Zoomcar customer and have to pay fuel expense of bookings

Economics don’t make sense for long term, as subscribers won’t be owning the car even if they subscribe for 2-4 years

Speed governor, interstate permit issues, GST registration, other terms and conditions


  • Zoomcar: Self drive car rental company based in Bengaluru that facilitates the subscription, listing and bookings detailed below
  • Subscriber: An individual who subscribes for a car from Zoomcar, by paying a monthly rental (of around 22k INR onwards, depending on the car
  • Listing: When a subscriber doesn't need his/her subscribed car for sometime, he/she can list the car on Zoomcar's platform. Other Zoomcar customers will be able to book this car for their personal use, usually for a short duration, by paying a daily rent. This rental income is shared between Subscriber and Zoomcar. Subscriber gets 75% and Zoomcar gets 25%, but from the earning subscriber will have to spend on fuel, factor taxes and may be set aside a portion for possible maintenance expense beyond what's covered by Zoomcar
  • Booking: Any zoomcar member who wishes to take a self drive car. The car assigned to a booking might be the one subscriber has listed, enabling subscriber to earn a portion of rental paid
  • The Original ZAP program: Customers buy a car of Zoomcar's choice and lists it on Zoomcar when they don't need it. In this model customer pays full amount and owns the car, its maintenance, zoomcar shares revenue earned when the car is listed and booked.

What is ZAP Subscribe program?
You will be paying a fixed fee to Zoomcar and get to use the car, by paying for fuel and complying with few other terms. Zoomcar owns the car, takes care of maintenance (to some extent only) and if you don't need the car for few days, allows you earn some revenue by listing the car on Zoomcar platform for other customers to rent from.

What are the subscription fees?
Below are the current subscription fees. A 12% tax applies on top of amount shown in the website. Cheapest car you can take is Tata Tiago, that will cost you Rs 21280 per month. SUVs cost around 40k a month.
Monthly Subscription Fee + Tax= Total, INR
Tata Tiago XM
19000+2280 tax=21280 Total
Ford Ecosport Titanium
30000+3600 tax=33600
Hyundai Creta E+
31000+3720 tax=34720
Ford Figo Titanium
22000+2640 tax=24640
Tata Hexa XE [Review]
36000+4320 tax=40320
Mahindra Scorpio S5
35000+4200 tax=39200
Hyundai i20 Sportz
25000+3000 tax=28000
KUV100 K4 100 NXT
21000+2520 tax= 23520
Grand i10 Magna U2 1.2 CRDI
22000+2640 tax=24640
Mahindra XUV W6
37000+ 4440 tax = 41440
Mahindra TUV300 T6 Plus
31000+3720 tax=34720
You can subscribe for 6, 12, 18 or 24 months. Amount to be paid monthly. Termination possible with one month notice.

22k per month is NOT a small amount-why should we subscribe? What is the savings?
Yes, 22k per month for a small car is not cheap. It is 2 to 3 times the EMI. There is a possibility of earning a portion of this subscription fee back, by listing the car on Zoomcar. This earning is what Zoomcar refers to as 'Savings'. The earnings will always be less than subscription amount and subscriber should factor fuel, tax and maintenance expense from his earnings.

The ZAP Subscription scheme might be good consideration in certain scenarios
  • If you don't need the car for certain duration, you can list it on Zoomcar platform and let other zoomcar customers book your car. Zoomcar will share a portion of revenue with you. If you need the car for only 15 days a month, remaining 15 days you can list it for others to book- you may earn up to 9000 rupees (if your car gets booking for all 15 days). After fuel expenses and tax deduction, you can expect to earn about 5k, bringing down your net subscription expense to 16k+
  • If you need the car for only 10 days, you can list it for 20 days and may earn up to 12k (probably 7k after fuel expense and taxes). Note that these earnings are only if someone books your car, which is not guaranteed.
  • This possibility of earning some revenue from other zoomcar customers is what is claimed as "savings"
  • You don't want to worry about maintenance (only up to a limit 0.75 Rs per km)
  • You can change cities or change cars if needed, giving you high flexibility, not having to worry about various hassles that come with car ownership.

Note that if you list your car for all 31 days, you will probably earn max 80-85% of subscription fee (around 19k for Tiago). After accounting for fuel and tax you may be left with 14-15k, so you've to spend around 7k from pocket even when you've not used the car for a single day (this is for cheapest Tiago)

What else ZAP Subscriber should be aware of
1. Fair use policy- subscribers can drive upto 8000 kms per month- roughly 260 kms per day, which feels adequate enough for regular office use and some weekend long drives. If you're subscribing for shorter duration, usage limit will be proportionately less. I am guessing this includes kms zoomcar customers consume. If you get a 15 day booking with 300 km per day, that will take up half the quota. Excess km usage will be charged at Rs 1 per km. You will be paying for fuel- yours and customers'

2. Maintenance covered-but only upto Rs 0.75 per km for small cars and Rs 1 per km for SUVs. If you've driven 1000 kms a month on a small car, any maintenance expense beyond Rs 750 will have to be paid by you. Note that a typical car service costs at around Rs 5000 (oil change, labor, some minor repairs and tax etc). The km count includes kms used by subscriber+ zoomcar customers when it is listed. In other words, subscriber will be liable for all long term maintenance issues caused by Zoomcar customers.

This can get tricky in case of major maintenance- a customer may abuse the car and critical components like clutch plate, tyres etc may need replacement earlier than their normal lifespan. It is not possible to check these things after each rental attribute the damage to one particular customer. A set of 4 car tyres cost around 15 to 17k and will have a lifespan of 35000 kms- that alone is Rs 0.45 per km. (tyre change is not covered under maintenance- subscriber will have to do it at their expense) What happens if at the end of 2 years car dealer says "Gearbox is weak, needs replacement, clutch assembly needs replacement, engine needs major repair, total 1.5-2 lakhs"- not sure who will pay- can the subscriber opt of these maintenance and return the car or will all these expenses be forced upon the customer?

For minor dents and scratches, subscribers will have to pay a few thousand rupees as penalty per incident (there's an upper cap of INR 10000, which is good)

Ideally there should be a cap on subscriber's maintenance liability (similar to accident damage liability) Overall long term customers should factor a possible maintenance expense of a few lakh rupees besides subscription amount. This can significantly alter the economics for the subscriber, who is under impression that maintenance is taken care by the company.

During initial stage, all are new cars, hence maintenance expense would be low. But after an year things can change. Older cars demand higher maintenance. Not sure if Zoomcar will keep buying new cars for every subscriber or at some point in time subscribers will have to take older cars.

3. Speed governor and interstate permit fee: The car will be yellow on black number plate. They are most likely to come with speed governor, which limits the top speed to 80 kmph, as per state government regulation. Also interstate travel will incur extra expense, as state permit fee needs to be paid.[Details] You should factor these.

4. GST Registration required
In order to get input tax credit you'll be required to have a GST registration. Once registered you will have to keep filing returns at regular intervals or pay someone to do it for you.

5. Minimum listing period
Seems like subscribers should list the car for a minimum duration every month [Detailed policies here] Not listing will attract a penalty

6. Car will be parked at your location during listing
Customers will come to your home/parked location to collect and drop of the car. This may cause privacy issues as strangers will now enter your home/apartment and also there may be a need for you or someone to be present at the venue whenever a customer comes to pickup/collect a car. Zoomcar has remote lock/unlock facility, so human presence not needed- not being present can cause some risks like customer not reporting a new damage etc. Parking the car at Zoomcar facility will attract extra charge.

7. Check the variant
While some models like Figo and Ecosport seem to have a near top of the line Titanium options, others like Hexa have cheapest variants that miss most of the safety, entertainment and comfort features. Other cars seem to be mid level variants. Do check the variant and ensure you're comfortable with it.

How does Zoomcar benefit?
1. Easy returns. A Tiago XM costs 6 lakhs on road. If Zoomcar can get subscribers for 30-32 months, the cost of the car will be recovered. Any subsequent earning will be pure profit. A rental car will have a decent running life span of at least 3-4 years. They get their money back in first 2.5 years, earn more for rest 1.5 years and then sell off the car and keep the sale value too. Of course some amount has to be spent on insurance, maintenance and other things but that will be very less.

2. No need to spend on parking space and fleet executive. Subscriber's house now becomes delivery centre. Reduced operating expenses. Subscriber will do all the work of fleet executive- cleaning the car, fueling it up, be there while customer collects/returns it etc.

3. Limited maintenance liability- Any maintenance expense beyond Rs 0.75 per km will be recovered from customer. End of subscription term if Zoomcar claims major repairs/replacements, subscriber will be liable to cough up most of the money. Ideally it should be other way round- customer's maintenance liability should be limited to a reasonable amount and all excess should be taken care by Zoomcar.

4. Get to pass risk of low utilization to subscriber- Once Zoomcar gets a subscriber, monthly income is guaranteed. If the subscriber lists the car but no one books, the loss is for the subscriber (Zoomcar guarantees a payout of 10000 if listed for 20 days- this is like giving 10k back from 21k customer has paid to use the car for just 10 days.

Is ZAP Subscribe a great option instead of buying?
ZAP subscribe is possibly a good option in following scenarios
1. Your need for a car is short term- say few months only. May be you're moving cities or going abroad etc- then subscribing could be better (spend 130k on 6 month subscription with a possible 50k earnings (net spend 80k) instead of spending 6 lakhs on a new Tiago car and then sell it for say 5/5.5 lakhs)

The economics might be attractive for expensive cars- instead of spending 15 lakhs buying a Creta, spending 2 lakhs on 6 month subscription might be tempting to some, if the need is for few months only.

2. Your need for a car is only for few days a  week. You can hope to earn a part of your subscription fee back by listing the car on Zoomcar platform for others to book

3. You don't want to spend a huge amount upfront as down payment but comfortable paying a monthly subscription fee

Zoomcar promises a guaranteed payout of 10k per month if you list it for minimum 20 days per month. Factor 2 to 3k from that amount as tax and fuel outgo- net pay out of say 7k. This means you'll be paying about 15k for 10 days or Rs 1500 per day. Might be cheaper to manage with Uber/Ola or try Zoom Commute, the weekday subscription model which might be more convenient for some of you.

The economics don't work out if you need the car for long term. Like if duration is one year, you'll be paying 2.5 lakhs in subscription. Buying a car for yourself and selling it will be more economical (buy at 6 lakhs, sell for 5 lakhs- 1 lakh depreciation)

My feedback on the ZAP Subscribe program
  1. Six month minimum subscription duration seems bit long. Giving a shorter duration like 2 or 3 months will give more flexibility to customers who are in a city for short duration
  2. Display should include tax amount and benefit payout should disclose approximate fuel and tax expense, so that people get clear idea. Seeing a smaller amount and later realizing that they've to pay 12% tax extra and from the payout good part will go away for fuel and tax expenses will annoy subscribers. Show realistic numbers upfront.
  3. Display variant info for better assessment
  4. Disclose hidden items like speed governor/speed limits, interstate permit fees, major maintenance expenses like replacements if any etc
  5. At this moment, the subscription amount is not making economical sense as an alternative to buying a car- two year subscription costs 4.4 lakhs or 75% of car's value whereas purchase price is 6 lakhs + another 50k on insurance and maintenance for 2 years. For long term usage, purchase still makes sense. Zoomcar has a ZAP program for such people- buy a car, use it when you wish and list it on Zoomcar when you want to rent it out. Given that what we see today is a launch price, actual subscription cost may go up over time.
Let me know what you think of this ZAP Subscribe program. Attractive? Rival Revv had launched a subscription model called Switch sometime earlier. I had written a detailed review of Switch but now they've changed pricing model a bit, so I need to update my post soon.
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  1. I have 2 cars (Santro-2005 and Manza-2010) that I use only on road trips. Any business meeting/work/friends catch up in any of the cities that I am in, I use public transport or uber. It's idle for 95% of the time. Looks like a good idea, but just worried about maintenance costs since someone on zoomcar may use it through the month.

    Will read and re-read it. I found it a little confusing since you keep switching between giving car on ZAP and taking care on ZAP :-)

    1. I have refined it a bit now. Hope it makes more clear

  2. They do not take car more than 3years old

    1. Not clear- in Subscription model Zoomcar buys the car and gives to subscribers

  3. It is clearly written, didnt take older than 2015 models..


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