Own A Car or Rent One ? The End of Car Ownership In India Has Begun?

Ola has raised US$210 mn- that’s crazy money!! Now I am sure Bhavish with all this money will make sure that other people follow his footsteps- never OWN a car!
The fact is that he is not just campaigning for his business, but actually saving money by not owning a car! A quick analysis shows that monthly cost of owning a car is much higher than taking a radio cab for a daily travel of less than 50 kms.
Before jumping to the workings, some basic assumptions are:
Sedan car cost= Rs8 lacs, Loan component =80%, Interest rate=11%, Loan Tenure= 5 years, Car mileage= 13 kms/litre, Fuel price (petrol)= Rs 75/litre and a 22 day working month.

Renting Car Vs. Ola/Uber : India Analysis
Renting Car Vs. Ola/Uber : India Analysis

Now, with Ola (Sedan) at Rs21/km in Mumbai, clearly shows that its better owning a car if you drive >80 kms/day (with driver) or >50 kms/day (without driver).
Owning A Car Vs. Uber/Ola/TFS?
Owning A Car Vs. Uber/Ola/TFS?

And guess what, if you are in Bangalore then you MUST not own a car because Ola offers a Sedan @ Rs13/ km which would mean that owning a car (without driver) would make sense if you are driving more than 100 kms/day.
Pricing of Ola/Uber/TaxiForSure and Meru
Pricing of Ola/Uber/TaxiForSure and Meru

On top of this, armed with such massive funding I am sure that for the next one or two years customers will have a great time with loads of offers/discounts. Some of the insane offers going on currently which make a car owner look like a fool are…

And on top of this, as the drivers get more rides, the economies of scale or efficiency will only bring down the cost of these rides further.
The end of car-ownership has begun!!
Best of luck Ola, Uber, Taxiforsure, Meru..
[About the author : Guest article by Sandeep Reddy. Follow him on twitter @hsrdce.]