Hype founder and CEO Raghav Belavadi says when people don’t have the money to buy cars, renting and subscription is a good option.
The car rental market in India is expected to be worth $1.5 billion by 2023, according to Statista, a German market research company. Luxury-mobility startup Hype says that it has achieved 10 times growth in just two years of its operations. The Bengaluru-based company plans to reach 25 cities by 2020 and also enter the yacht and private-jet rental space in the coming years.
Raghav Belavadi, founder and CEO, Hype, spoke to Fortune India about the luxury car rental space and why renting makes more sense during an economic slowdown.
Globally, the luxury car market is facing headwinds. How much has the impact been in India?
Yes, globally the luxury car market may be degrading. But not the rental market. Because if you don’t have the money, you can’t buy expensive cars. So, when there is a downturn, it’s actually good for us because people may stop buying, but the desire to drive a luxury car won’t die. So, they would still somehow want to drive the car. This is only in luxury cars. You see that people who buy luxury cars enjoy a certain kind of financial status, for the decision to buy may not affect them that much. The ones who are migrating to a slightly aspirational value, they would look for something like a premium economy kind of stuff. They will continue to rent. Their decision to buy might be postponed. It comes back to our core premise: Why buy when you can rent? So, when the economy is not doing well, it really doesn’t make much of a difference to the luxury industry.
You mean the luxury industry or the luxury rental industry?
I mean the whole industry. Luxury hotels and the use of luxury cars per say don’t suffer a big hit. I am not sure what part of the market takes the biggest hit. Like real estate and investment suffer for the long term. But rental business is short-term and based on your needs. So, I firmly believe that it doesn’t get affected that much. In fact it should actually grow. When people don’t have the money to buy cars, renting and subscription is a better option, and makes more sense.