Zoomcar's illegal Amigo scheme: Pros, Cons - eNidhi India Travel Blog

Zoomcar's illegal Amigo scheme: Pros, Cons

Zoomcar has introducing Amigo, a scheme where car owners can list their cars on zoomcar, let zoomcar customers book them and earn a share from the rental money earned from zoomcar customers.

Zoomcar had tried ZAP, ZAP subscribe and other such schemes in the past, trying to make the general public pay a subscription fee and recover their capital investment faster. But these schemes haven't been popular due to various complexities, rules and payment issues.

Now Zoomcar has recently launched Amigo, which claims to offer car owners an opportunity to earn extra money. Zoomcar claims you can earn "up to" 36000 per month by listing your cars.

Zoomcar Amigo doesn't detail which car models earn how much. I am guessing 36000 is for expensive vehicles like big SUVs or super luxury cars if listed for whole month. (Zoomcar charges Rs 3000 to 6000 Rs per day for mid size SUVs like XUV500 depending on distance used), so at 1200 INR per day Zoomcar will share less than one third of that money with you). Ola takes 20% as commission and car driver gets 80% to cover for his/her expense. Same should be done here- Zoomcar should keep max 20% of booking revenue as commission and remaining 80% should be handed over to owner, including extra Km charges, damage penalty, late return fee etc. But don't think zoomcar has any such intentions. They will keep 60-70% of the earning without having to spend a single rupee on the car.

Update: Zoomcar says they will give a guaranteed revenue for first 3 months, 28000 for compact SUVs like Venue if listed for all 30 days. 4th month onwards it will be revenue sharing- 60% to owner, 40% to Zoomcar. But the numbers suggested do not meet this- 50 Rs per hour for SUV is 1200 Rs per day while rent customer pays is 3000 to 6000 depending on kms.

I sent Zoomcar Amigo a few questions related to legality, commercials and zoomcar's liability in case of things going wrong., didn't get any reply even after 1 week. They were only following up again and again for me to upload documents but were not ready to answer questions I had asked. Zoomcar has added a few videos online, in one of them person says Zoomcar person came and took care of the car during listing, which is a clear lie, as their terms state we have to clean the car, fill fuel, check for damage etc. Zoomcar has disabled comment in their channel- clearly not willing to take any questions or criticism. 

Zoomcar has defined some rules like cars older than 7 years are not eligible, specific models like Alto are not eligible. Cars that have run more than 70000 kms not eligible (Zoomcar has in its listing cars that have run close to 1 lakh kms) Amigo feels like a desperate attempt to make money from someone else's car. Zoomcar will list your private car on their platform, earn money on daily rent, damage charge, late return, extra kms and so on while paying less than 30% of that money to you, the car owner.

What is in it for Zoomcar?
1. They don't have to invest in buying cars. Saves 7 to 30 lakhs per car outright.
2. They don't have to worry about depreciation & maintenance. These headaches are passed on to owners
3. They don't have to maintain a garage and staff to manage cars and bookings. Car owners will work as free fleet executives
4. All risks are now someone else's headache- cops impounding the cars, accidents, major damages, breakdowns etc. Zoomcar can getaway by providing some namesake support while owner runs from pillar to post between zoomcar, customer, service center, police, insurance agency, 3rd party and so on.

Instead of being a full fledged car rental company, zoomcar can just play role of a commission agent, take a cut on every booking without needing any investment or manpower.


Is it a good idea to list your car with Zoomcar Amigo?
There are several pros and cons. Cons or disadvantages outweigh pros.

Cons or disadvantages of listing your car with Zoomcar Amigo
1. It is outright illegal to rent your white board car for commercial usage. Commercial usage vehicles should have taxi registration or yellow on black registration plates. If caught by police or if car is used in any fraud/illegal activities as a vehicle owner you will be a party to the crime.

In a twitter reply Zoomcar says it is legal, without sharing any further details. BlaBla car which allows people to share a ride and earn was deemed illegal by transport department- officials sign up as customers, board a vehicle and would seize the car later. Unless zoomcar explains how Amigo program is legal, we will have our doubts.

I am guessing zoomcar is thinking "no one will know- who will suspect a whiteboard car"

2. Your car will be abused, battered and damaged. Most rental customers do not care for the car like an owner would do. They will drive harshly on bad roads, burn clutches, tyres and other consumables faster due to aggressive usage, may not care for cleanliness, safety or long term life of your car. While external damage might be spotted, It is impossible to track or prove these abuses to the vehicle that harm the engine, underbody and other components. It is even more impossible is to collect any kind of compensation for your loss.

Update: Zoomcar says Amigo cars will be allotted to only those customers who have an internal rating of above 80.

3. Insurance claim may be denied outright as you are making commercial use of personal vehicle. Be ready for long fights, follow ups, begging and financial loss, as Zoomcar will only "assist" you in the legal and insurance process and won't assure you of anything.

4. You have to do the work of a fleet executive- clean the car between trips, keep track of damages- existing and new, keep paying for all traffic challans Zoomcar customers may trigger, keep following up with zoomcar for payments. Time and effort you've to spend on this might be worth more than what you earn. Zoomcar will charge you thousands of rupees extra if you don't want to do all these and leave the car at zoomcar facility.

Zoomcar has some incentives to make customers return the car full tank etc, but this may not happen most of the time. If you have to go to office from 9 AM to 7 PM, one booking ends at 10 AM while next booking begins at 5 PM someone needs to be at home to attend to the car, fuel it up, clean it and keep it ready for next customer.

5. Minor damage: owner's responsibility: Zoomcar will only assist/compensate in case of major damage (vehicle doesn't move and broken down). Minor scratches, dents and other damage customers cause is your headache, though Zoomcar will slap a penalty of several thousand on such customers.

6. Fuel, Maintenance, Insurance etc are your headache: 

7. Zoomcar will modify your vehicle. They will add GPS tracker, speed governor (80 kmph), their own fast tag, keyless entry system etc. I was told no branding sticker will be added. Cops and public won't know that this is a self drive rental vehicle.

Also I don't think zoomcar pricing will vary by variant. Rental companies buy cheapest variant of cars and list them at low price. You may have highend variant which costs 2x more but you will still get low price and if some features stop working because of misuse/abuse by rental customer, you spend from your pocket to fix it.

Pros:
1. Earn a small amount if your car is idle at home and not being used. (assuming Zoomcar pays you promptly, twitter is already full of complaints on this as well. Zoomcar had major refund crisis during the pandemic

If you love your car, you may not want to hand it over to strangers through Zoomcar Amigo- a few thousand you may earn will not compensate for minor damages and various abuse your car will go through, followed by increased maintenance and repair expense. Loss of peace of mind, time and effort needed to follow up with Zoomcar may not be worth it

If you have an old secondary car then Amigo might be a good idea to try. You don't worry so much about any further damage the car may have to face and little bit of revenue helps in your financial condition.

If they ask me, below is what Zoomcar should clarify:
  1. Spell out guaranteed earning (for initial period), min and max earning for each car type thereafter. Don't fool people with "up to 36000"
  2. Assure promised daily payment till car is returned in case of accidents or police case or other reasons
  3. Get this business model legal node by seeking necessary approval from Govt/RTO
  4. Have a working customer care and ensure concerns are addressed within agreed SLA
  5. Because Zoomcar is not spending a penny on the car and making free money out of someone else's car, they should give a security deposit amounting to the value of the car, which owner should be able to encash if there are major issues for no fault of the owner (accident damage, police seize etc)
  6. While car owner needs to agree to all of Zoomcar's terms & conditions, If I am a car owner I would need Zoomcar to agree to my terms & condition- guaranteed daily revenue if car is damaged or seized, security deposit which will be confiscated if Zoomcar doesn't pay on time, penalty for zoomcar in case of late payment etc.
Do share your thoughts and experiences.

4 comments:

  1. And yea. They say they take all the details of the customer before a car is booked along with his selfie, its all trash. I lost my car. The person who booked it just faked all his addresses. Its been a month and my car is still not found.

    ReplyDelete
    Replies
    1. sad to know this.. they can track using GPS right? No luck there?

      Delete
  2. My brother also had bad experience with them. Its been some days that the device from his car is not taken out. Zoomcar customer service does not provide satisfactory replies.

    ReplyDelete

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