As India’s rental economy rises, are millennials the driving force?

The practical Gen-Y has time and again shown a clear inclination towards the more feasible options in place of the luxurious ones, and it is no different when it comes to choosing how they want to travel.

As India’s rental economy rises, are millennials the driving force?

Vehicle rental services are proving to be millennials' first choice. (Photo: Getty Images)

A recent study shows that millennials — people reaching adulthood in the 21st century — prefer to avail car-hiring services rather than buying a car for daily commute. Millennial urbanites show little interest in owning a vehicle — earlier considered to be among the biggest rites of one’s transition into adulthood. The Gen-Y is arguably the ‘cheapest’ generation so far. They have time and again shown a clear inclination towards the more feasible options in place of the luxurious ones, and hiring a car instead of buying fits perfectly into the pattern.

Noor Bagga, a student of Chartered Accountancy, says, “The expenses of hiring a car are much lower as compared to purchasing one. Also, car ownership is an interminable nightmare of piling dues. I’d definitely go with the former!”

Owning a car is in and by itself a big and daunting investment, and the further addition of insurance, parking and servicing costs make it even more so. Said urbanites then find themselves approaching the cheaper, more comfortable commutation utilities facilitated by vehicle renting and hiring service providers.


Says a spokesperson for Ola, one of the country’s leading ridesharing platforms, “Ola understands that choice and availability of vehicles are the most important elements for a commuter and hence has been building products and services that enrich their commuting experience”. Elaborating further, the spokesperson adds, “Our deep research and customer insights have suggested that one of the most favourable ways of tackling challenges such as vehicular congestion, pollution, average road infrastructure, is to build mobility as a service where people do not have to own a car but can use a car just like they would use any other service.”

The findings by Ola are in apparent congruence with the millennials’ understanding of mobility services. Sakshi, an English Honours student of Ashoka University, says, “Hiring a car, I think, is the better alternative. Personally, I don’t feel the need to actually buy a car just to land in office five times a week.”

Millennials are dotting the convenient riding apps such as Ola and Uber, and even the premium Avis platform, for both office as well as long route travels. In fact, recent figures have shown that in the first five months of 2018, a total of 79,321 new private cars were licensed, down 5.3% compared to the same time last year. This statistical note is a clear indication of the shifting auto-market and its implications.

The urbanites of Gen-Y have a clear, if not obvious, appetite for flexibility and liberty. Vehicle rental and hire services rid the millennial of today of any car ownership related troubles, like availability of parking spaces, safety of one’s car, sufficiency of fuel, so on and so forth. Instead, provides them with a fitted, more useful substitute in the form of car lease and rental services.

Krityaan Thapar, a student of VIT, Chennai, says, “Well, quite honestly, I’d prefer to go by cab. With someone driving you around, even if there’s traffic, you can multitask, rather than having to get stressed out and worried while driving through the long commute.” He adds, “Add to the parking woes for most personal cars, and it’s almost a blessing that Ola, Avis and Uber exist.”

Avis, another of India’s leading car hire, leasing and fleeting management providers, has observed a 25% incremental trend in the users renting their services in the last quarter. This upsurge of cab commuters, as per Avis, is fuelled by a demand for premium chauffeur drive services in India.

Another aspect millennials take into review while adopting for car-hiring services is the significance, or rather value, of their time. Prannya Arora, a medical student of Lady Hardinge Medical College, says, “After a tiring day of attending to patients, I would be way too tired to drive home. I can just hire a cab. It’d also save me some time to rest.”

Born and raised in an increasingly developing world, the Gen-Y urbanites find themselves seeking for one-touch-and-go services. Avis, Ola and Uber provide this mammoth customer-base with just that! Vehicle rental services save both, time, and effort. And isn’t it smart spending if you are not the one honking the car horn in the midst of traffic induced purgatory. Millennials really know their time!

A recent report by Technavio’s analysts suggests that the global car rental market shall grow at a compound annual growth rate (CAGR) of 17.52% during the period 2018-2022. With the statistics in hand, it can be inferred that millennials’ economic choices are already inducing unexpected changes in the auto market, by publicising rental economy.