Short-term rentals dominate as Gen Z and millennials reject EMIs for pay-as-you-go mobility—Tier 2/3 cities account for 30% of new users.
India’s car ownership dream is getting a reality check. Zoomcar Holdings Inc. (OTCQB: ZCAR), India’s largest peer-to-peer car-sharing marketplace, released its India’s Self-Drive Shift Report 2025 on December 2, revealing a decisive shift among young urban Indians from owning cars to accessing them on demand. The data tells a compelling story: short-term rentals account for 91% of trips, while long-term subscriptions grew 44% year-on-year, signaling that rising running costs, congested cities, and changing lifestyle priorities are pushing consumers—especially Gen Z and millennials—away from traditional ownership models.
Table of Contents
Key Report Findings
| Metric | Data |
|---|---|
| Short-Term Rental Trips | 91% of all completed trips |
| Total Users (Jan-Oct 2025) | 2,62,585 users chose self-drive rentals |
| Subscription Growth | 44% year-on-year increase |
| Subscription Share | 5% of all bookings |
| Tier 2/3 City Demand | 30% of new guests in 2025 |
| Average Subscription Period | ~14 days |
| Host Earnings | ₹20,000-25,000/month (subscription model) |
| Guest Reach Per Vehicle | 50+ unique guests annually (high-utilization cars) |
| Full Report | Download PDF |
The Ownership Crisis: 90% Idle Time, Rising Costs
The report finds that rising running costs, congested cities, and changing lifestyle priorities are pushing consumers toward flexible mobility solutions. Private cars continue to remain idle nearly 90% of the time even as owners face rising expenses on fuel, servicing, and insurance—a harsh economic reality when EMIs, parking fees, and maintenance can consume ₹15,000-25,000 monthly for middle-class families.
For Gen Z and millennials entering careers in expensive metros like Bengaluru, Mumbai, and Pune, the math doesn’t add up: why lock ₹5-10 lakh in a depreciating asset (plus ongoing costs) when app-based access provides cars on-demand without insurance headaches, depreciation anxiety, or parking wars? According to TechnoSports’ urban mobility analysis, this generational shift mirrors global trends where Millennials in the US and Europe have abandoned car ownership for ride-hailing and car-sharing at record rates.
The Access Economy Wins: 2.6 Lakh Users Choose Flexibility
Zoomcar’s internal data shows strong momentum for access-based models. In 2025 (January-October), a total of 2,62,585 users chose self-drive short-term rentals on Zoomcar as their primary mobility choice, reflecting a clear preference for flexibility and control. Unlike ride-hailing (Uber/Ola) where drivers control routes and availability, self-drive rentals offer autonomy—critical for weekend getaways, multi-city work trips, or families wanting privacy during travel.
Short-term rentals dominate usage, making up 91% of completed trips and reflecting a strong preference for pay-as-you-go mobility. The model resonates because users pay only for usage (hourly/daily rates), avoid maintenance costs, and switch vehicle types based on trip needs—hatchbacks for city errands, SUVs for mountain roads, sedans for client meetings.
Subscription Model: The 44% Growth Story
Long-term subscriptions grew 44% year-on-year and now account for 5% of all bookings—a small but rapidly expanding segment. Subscribers, largely between 25 and 40 years old, use Zoomcar for hybrid work, relocations, extended stays, and long-duration travel, with average subscription periods of around 14 days.
This cohort represents professionals navigating India’s hybrid work culture: Bengaluru techies spending two weeks monthly in Goa co-working spaces, Mumbai consultants on 10-day client projects in Pune, or families testing new cities before permanent relocations. The subscription model offers car ownership’s convenience (24/7 access, no booking friction) without ownership’s financial burden, according to mobility trend research.
Tier 2/3 Cities: The Next Mobility Frontier
Demand from Tier 2 and Tier 3 cities is accelerating and contributed to 30% of new guests this year—a seismic shift for an industry historically concentrated in metros. Cities like Coimbatore, Jaipur, Indore, and Visakhapatnam are driving growth as:
- Rising incomes create aspirational travel demand
- Inadequate public transport makes self-drive practical
- Weekend tourism (nearby hill stations, pilgrimage sites) requires flexible mobility
- Wedding/event travel needs multi-day car access
This geographic expansion validates Zoomcar’s thesis that India’s mobility transformation extends beyond Bengaluru-Mumbai corridors into heartland cities where car ownership remains aspirational but increasingly impractical.
Hosts Earn ₹20-25K Monthly: The Sharing Economy Dividend
Hosts are benefiting from this shift. Individuals listing their cars on subscription typically earn around ₹20,000 to 25,000 per month, along with additional income through short-term rentals. High-utilization shared vehicles on Zoomcar enable more than 50 unique guests every year, expanding mobility access across Indian cities.
For car owners facing idle-asset economics, Zoomcar transforms depreciating liabilities into income streams. A ₹10 lakh sedan sitting unused 90% of the time now generates ₹2.4-3 lakh annually (₹20-25K monthly × 12 months), offsetting loan EMIs, insurance, and maintenance while keeping the car active and maintained through regular use.
Technology Backbone: AI, IoT, and Insurance Innovation
The report highlights Zoomcar’s ongoing investments in technology that strengthen platform trust and reliability. These include:
- AI-led demand prediction (optimizing pricing and availability)
- Smart cataloging (matching guest needs with vehicle types)
- IoT-based tracking (real-time vehicle monitoring, theft prevention)
- Integrated trip protection (damage waivers, accident coverage)
Zoomcar has also expanded partnerships with leading insurance companies to enhance asset protection for hosts through robust contractual liability and safety covers. Together, these innovations have contributed to meaningful improvements in availability, safety, and pricing efficiency—addressing the trust deficit that historically plagued peer-to-peer car-sharing in India.
The Vision: 1 Lakh Hosts, 5 Million Guests by FY30
“The future of mobility is not about owning more cars. It is about unlocking more journeys,” said Abhilash Kasliwal, Business Head, Zoomcar. “Young consumers in India want convenience, flexibility, and financial freedom, and Zoomcar is enabling that shift at scale.”
Zoomcar aims to empower more than one lakh hosts and five million guests with flexible and sustainable mobility solutions by FY30—ambitious targets requiring 40x guest growth and 100x host expansion from current levels. Success hinges on cracking insurance partnerships, maintaining platform trust, and educating car owners on sharing economy benefits.
What This Means for India’s Auto Industry
The report’s implications extend beyond Zoomcar:
- Auto manufacturers must rethink ownership-centric sales models
- Insurance companies need products tailored for shared mobility
- Urban planners can reduce parking infrastructure if utilization improves
- Environmental advocates gain allies (fewer cars, higher utilization = lower emissions)
As India’s cities choke on traffic and parking scarcity intensifies, the access economy offers a pragmatic alternative to endless car proliferation. Whether traditional automakers adapt or new-age platforms like Zoomcar capture this shift will define India’s mobility landscape through 2030.
Also Read: India’s EV Revolution and Urban Mobility | Gen Z Transportation Trends
