Investing in Car Rental Business | Returns from Drivezy

One option to earn passive income is by investing in car rental business. By car rental business I refer to model where car is offered on rent without driver/chauffeur – The vehicle would be self driven by customer who rented it.


Starting a new car rental business from scratch would not be a practical option for individuals who are looking for “passive income” by investing in car rental business. To start a self-drive car rental business you have to comply with requirements stipulated by Indian Government’s “Rent a cab scheme, 1989”.

Requirements set by "Rent a cab scheme, 1989"

  1. You have at least 50 cars
  2. At least 50% of cars should be air conditioned.
  3. You have office/presence in at least 5 cities.
  4. At least one telephone connection that is operational 24 hours.
  5. You have ample parking space, maintenance and repair facilities.
  6. Applicant has knowledge about passenger transport business.

A Hassle Free Way for Investing in Car Rental Business

A hassle-free approach to get into car rental business is to attach car with existing Car rental companies. Based on my analysis the following list of self-drive car rental platforms were offering investment opportunity for individuals to attach cars on their platform.

Prominent platforms that offer self-drive car on rent:

  1. Drivezy
  2. Zoomcar
  3. Myles
  4. Revv

Above is not an exhaustive list, but established players with pan India presence. Some small players based out of Bangalore whom I spoke to were also willing to offer investment opportunities, but there is no way to know their background, financial stability and ethics of these players making it difficult to judge if they would be a reliable investment option.

How Profitable is Car Rental Business?

Prior to onset of Covid 19 I had discussions with Drivezy, Zoomcar, Revv, Myles to evaluate investment opportunities in self-drive car rental business. Each of them was running a marketplace program (Drivezy JustConnect, Zap by Zoomcar, Myles angels) that let individuals to buy and attach new cars on their platform (In fact, at one point Zoomcar was trying to move to a complete Market Place model without owning any cars on their own). The individual / partner invests an amount that covers cost of new vehicle, RTO charges, insurance, speed governor, GPS tracking device and any other accessories installed.


Post listing of vehicle, partner gets 70% of revenue generated by the car. 30% of revenue generated goes to the car rental company. The best part was vehicle listing on most of the platforms came with a “minimum guaranteed payout” clause. The minimum payout guaranteed would be an amount sufficient enough to cover the monthly EMI charges of the car (in case you have took a loan).

Reserving Vehicle for Your (i.e. Partner) Self Use

This part is icing on the cake. Partners can block their listed vehicle for self use at any point of time for any duration. Once you block your car for self use, it can’t be booked by other customers.

This benefit came with a catch. If a partner has blocked his vehicle for self use, the “minimum guaranteed payout” clause will not be applicable for that month.

My Experience Listing Vehicle with Drivezy

I evaluated Zoomcar’s ZAP, Drivezy JustConnect and Myles Angels programs and finally choose Drivezy JustConnect. I choose Drivezy over Zoomcar because they offered a 42 month contract period compared to 36 months offered by Zoomcar ZAP.


Another point in favour of Drivezy was it allowed to continue operating the car beyond 42 months contract provided the vehicle was fit enough. But partner’s revenue share would be reduced to 60% and Drivezy would take 40% of revenue. But beyond 3 years, every rupee made is a bonus! After end of contract the vehicle would be salvaged (sold at whatever value possible) and sale proceeds would be given to partner, after deduction of any applicable charges by Drivezy.

This is an elaborate post covering Drivezy partner review based on my experience and return on investment for the car that I listed with Drivezy. If you want any info based on my experience, leave a comment on this blog post I will revert back on it.

Procedure to Attach Car to Drivezy

Drivezy provided multiple Car brand and models to choose from for attaching on their platform. Ford: Ecosport / Figo, Mahindra TUV, Tata Tiago, Maruti: Dzire / Swift VDI / Baleno / Ignis, Hyundai Eon. The guaranteed payout and earnings would be in proportion to price of investment cost of vehicle.


Initially I did not want to make a huge investment in car rental business without testing the waters. I decided to go with Hyundai Eon Era Plus. Hyundai Eon was the one that required minimum capital of all the models available. I attached my car at Bangalore, and it went live by early 2018.


The vehicle would not be registered in your name, the “Owner Name” was “AS JUSTRIDE TOURS AND TRAVELS”. This was in 2018, later they were registering with “Owner Name” as “DRIVEZY INDIA TRAVELS PVT LTD”. You would have already guessed it, technically the vehicle is not yours.


I made online fund transfer of capital amount towards purchase of car. Drivezy had an account with Axis Bank, Victoria layout branch in Bangalore. Post successful completion of funds transfer I got below confirmation mail.

Eon Era Plus Investment Amount
Hyundai Eon Era Plus Investment Confirmation Mail

Drivezy had tie up for loans. But those were business loans and interest rates looked higher than vehicle loans offered to individuals. That was logical as one can’t apply vehicle loan when the vehicle is not registered in his name.


A few weeks after my vehicle got listed, I visited Drivezy office in Bangalore. I counter signed the Vehicle Rental Agreement, received my copy of the rental agreement. That was on a 11 page Karnataka E-Stamp paper. What you see below is the first and last page of the vehicle rental agreement E-Stamp paper.

Investing in Car Rental Business
Vehicle Rental Agreement
Click on image to enlarge

Trivia: The Vehicle Rental Agreement is signed by Hemant Kumar Sah from Drivezy side. He is one of the founders of Drivezy.

Booking Volumes and Vehicle Utilization

The vehicle booking volumes were not that impressive during most of the months. Vehicle bookings on weekdays remained paltry except during holiday and festive season. Weekends saw a decent utilization. Weekends had a higher booking cost than weekdays, holiday season have an even higher rate. Effectively much of revenue was generated over weekends and holiday season.

For Hyundai Eon minimum guaranteed payout was Rs 13,795. Except for few months the revenue generated was less that this guaranteed payout offered by Drivezy. The returns generated were not as high as I expected. Had there been no minimum guaranteed payout the revenue generated would not even match the monthly EMI charges. The minimum payout assured by Drivezy was holding the cashflows positive.

It was like a bonus to receive payout higher than the minimum guarantee. I have received higher payouts for month of December which has lot of holidays and year end office shutdowns. Another month or two of higher payouts would be possible depending on factors like vehicle type/location etc.

Believing the guaranteed minimum payout offered, I listed two bikes with Drivezy. This turned out as bad investment. You can read more on this in my follow up posts Drivezy Two Wheeler Attachment Review | From a Drivezy Partner and two wheeler rental business in India.

Tracking Revenue and Bookings

Partner’s can track revenue generated, bookings made and vehicle status (if blocked for maintenance etc.) by accessing dashboard section of Drivezy JustConnect login.

Car Rental Dashboard
Partner Dashboard to Track Revenue and Bookings

Monthly Deductions from Payout

There were 3 recurring charges deducted every month:

  1. Parking charges: Rs 1,500 per month per car attached.
  2. IoT Device charges: This was Rs 800 for car. IoT device is required to track the car.
  3. TDS deduction: 2% of monthly payout. The deducted TDS was paid to IT department and would reflect in your form 26AS.


In addition to above fixed charge if there were any expense towards extra fittings etc, the same would also be recovered from partner’s account. For e.g., the car’s seats were fitted with Faux leather seat (refer image below) for protection and ease of cleaning. This had costed me close to 4,500 Rs. The same was recovered from revenue generated in my account.

Drivezy Eon Default Fabric Seat
Drivezy Eon Default Fabric Seat
Drivezy Eon Upgraded Faux Leather Seat
Drivezy Eon Upgraded Faux Leather Seat

What if Attached Vehicle Meets an Accident?

Good thing is from a legal standpoint you never come into picture anywhere (Remember? The vehicle is registered to Drivezy). The cost of fixing the car would be recovered from customer who had the booking. Customer’s liability is capped at a maximum of Rs 10,000. The vehicle also has insurance which would cover accidents.

At one point my listed car met with minor accident. When I requested for a photo of car it was promptly sent to me by Drivezy (partner) support team.

Current Situation on profitability

Covid 19 collapsed the business and earnings of car rental companies. From second half of 2020 onward car rental companies started liquidating their vehicle assets (both 4 wheeler and 2 wheeler). Situation started going in downward spiral path:

  • First, the “minimum guaranteed payout” clause was removed.
  • Next Drivezy stopped making any payout altogether. They were not paying the partner’s their entitled 70% of revenue share.
  • Then things bottomed out. The partner’s vehicles were taken offline and not available for booking anymore. Drivezy has permanently marked partner’s vehicle as “Vehicle blocked for General Maintenance” in partners tracking dashboard.
  • Things are falling apart with Drivezy. Even customers who owed refund from Drivezy for cancelled rides were not getting paid on time. Last heard employees were being let go, not paid salaries.

Situation turned sour not just for Drivezy, but for many other self-drive car rental companies including Zoomcar.


My attempt to generate passive income by investing in car rental business didn’t work out quite well. I had lost close to 30% of my capital invested. I was fortunate to some extent that my investment happened by early 2018 and I was receiving payouts for close to 2 years. For partners that listed vehicle more recently, the losses were much higher. My own two-wheeler investment with Drivezy was hit hard. As said already I will cover more about this separately.

Situation with other Self Drive Car Rental Platforms

I got in touch with REVV to see if they were accepting car listing from partners. At present they are not accepting car attachment from partners and below is what they had to say:

“We would like to inform you that at the moment we do not have any program to attach the third-party vehicles in our fleet. However, our team is working towards it and we will update you once it is active.”


Meanwhile, Drivezy is in advanced talks with Yamaha and might get acquired. If the acquisition gets through that would be a positive development for Drivezy partners. Drivezy Partners would get at least part of their pending payment that is accumulating since beginning 2020 time frame.

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