Hype is emphatic that the details of the car displayed to the user online should match with the car that he/she receives, be it self or chauffeur driven.
By Srinath Srinivasan
After working with Satyam, Accenture and in the insurance aggregator industry in Switzerland, Raghav Belavadi, on his return to India, found that the luxury car rental market in India was not served the way it should be. “When I wanted to hire a luxury car for family occasions, I had very few options and working out the rates were too complex,” he says. “Luxury car services need a certain level of commitment due to the cost and class of cars involved. Once, when I ordered a Mercedes S-Class, I got a BMW 7 series. While my provider said it’s of the same class and price range, he failed to notice that all those were unwanted information for me as a customer.”
Belavadi wanted to solve this problem with the help of technology and do away with the lack of commitment and middlemen. He believes that this is not a taxi business. According to him, it’s part of the luxury industry. He also found that the existing luxury car rentals did not have self drive option for the customers. With all this in mind, Belavadi launched Hype, a luxury car rental app, in December 2017, with an initial investment of $700,000.
Hype is emphatic that the details of the car displayed to the user online should match with the car that he/she receives, be it self or chauffeur driven. To do this, Belavadi and team are in touch with select car providers who are chosen after a thorough inspection of their cars. The pricing for the car and the rental period can be customised online as per user requirement. Payments are made online through the app/ website to make it as instantaneous as possible. Only commercially registered luxury cars are used. One of the notable car providers to the company is Ramesh Babu, a.k.a the Billionaire Barber from Bengaluru. Belavadi says that margins have been as low as 10% to as high as 70% which has also helped his company pass on many benefits to the car providers. He also states that because of this business model, revenue leakage in the luxury segment has been controlled and owners are happy to rent their cars via Hype. However, to create awareness among car providers and to get them to participate in this organised business model is a challenge that the company is still trying hard to solve.
Most customers have been from the film industry and multinational corporates. However, Hype looks at providing more services to high income groups and ultra-high income groups. Belavadi says that the addressable market last year was $35 billion and by 2023 it will grow to $69 billion. Currently, it provides cars in 46 cities across India and Belavadi hopes to raise funds with some venture capitalists to scale up the enterprise.
“Once we raise funds, we will break even in 2020. We want more people to know our brand and start driving luxury cars. Once you drive a luxury car for a while, your desire to own one will come down, because these cars are to be driven and experienced. And then you want to drive different brands of luxury cars than owning just one,” explains Belavadi, talking about his vision for the company.