Self -drive car rental business has a very large potential in India and many start-ups all across India are entering and considering entering this space. However, one of the biggest challenges that the self-drive industry faces in India is because a self-drive renter has to stop at every inter-state tax terminal along with all the truck drivers and drivers of other commercial vehicles to pay Inter-state taxes. International tourists are also harassed in different state by local policemen about payment of taxes scrutiny of related documents.
The model has huge growth potential. However, some International companies and Indian companies supported by International investors are trying to bypass the regulations in terms of licensing, permits and RBI guidelines in terms of credit card payments to disturb the market and harm the operators and their drivers who have followed government policy over the years disturbing the earnings of these operators or drivers.
It was in the late 80s when the government of India passed the rent-a-car scheme, permitting car rental operators to offer self-drive cars, besides a chauffeur drive option.
Though it's been more than 15 years since, the branded car rental companies have not hit the accelerator when it comes to penetrating the Indian market.
The procedures for starting self ride renting service is
Firstly, —No person shall engage himself in the business of renting a motor cab under this scheme without licence.
Under Rent a car scheme 1989, as per the provisions of section 4, —(1) An application for the
grant or renewal of a licence under paragraph 6 shall be made in Form 1 to the
licensing authority having jurisdiction in the area in which he resides or has his
principal place of business (hereinafter referred to as main office) and shall be
accompanied by a fee of rupees five thousand.
(2) Where the applicant has, besides the main office, branch office within the
jurisdiction of the licensing authority referred to in clause (1), the application shall
indicate such place with the number of motor cabs proposed to be stationed at each
(3) Where the applicant has branch offices outside the jurisdiction of the
licensing authority, the application shall be made to the licensing authority in
whose jurisdiction the branch office is situated, in Form 2 accompanied by a fee of
rupees one thousand in respect of each such branch offices.
No application for a licence shall be refused by the licensing
authority unless the applicant is given an opportunity of being heard and reasons
for such refusal are given in writing by the licensing authority.