Bengaluru: Rental startups will soon start rating customers to predict behaviour and reduce wear and tear, taking a leaf out of financial services players that use credit ratings to understand if a customer is credit-worthy and sell products accordingly.
Y Combinator backed Drivezy, a car and bike self-rental startup, will soon start giving scores to users. It will be partnering with other companies including self-drive car rental firm Zoomcar and Wicked Ride, a luxury bike rental startup, to launch a blockchain-based platform to rate customers. The platform is expected to be launched by end of this year.
Others like Furlenco and Rentomojo, which are furniture rental companies, have shared such user data among themselves and may formalise a ‘rental score’ system going forward.
Drivezy is building a platform that will be free initially, but will work as a Software as a Service-based model after a gap of two-three years when it gets sufficient customer data. The company has been working on this platform for the last one year.
The platform will create a profile and add a score to the user, based on a customer’s past behaviour. In addition, the profile will be validated through an Aadhaar-based KYC verification.
“At the moment, we do not have a way to predict customer behaviour. The problem is, when a company blacklists a customer, he or she can very easily move to another (rental startup), which is why this is being built in collaboration so that we can avoid such customers,” said a Drivezy spokesperson.
The system will work like the CIBIL system for the banking sector, which has helped the fintech sector verify customers and avoid losses.
“So, if a driver or the customer has a bad track record, the companies can charge a premium or a security deposit in order to protect its assets,” he added.
The move could resolve many trust-based issues for these startups, but will be challenging to implement, say experts.
For such a system to work, an Independent body would need to act as the central scoring utility, said Mahesh Makhija, EY Partner and Leader (Digital and Emerging Tech), adding it would need to work across market segments to scale up.
The self-drive rental segment has been abuzz as investor interest has picked up significantly, and the scoring system comes at a time when unicorns like Ola and Uber have seen flat growth over the last few months.
“This can be an interesting way going forward. Although we have shared data of blacklisted companies before, it is not an ongoing collaboration,” said Ajith Mohan Karimpana, founder and CEO of Furlenco. The company has had discussions before to have a rental score for the sector but it has not been formalised yet, he added.
Currently, these startups predict customer behaviour using existing data, and they predict outcomes based on various criteria such as demography and location. They already follow KYC compliance norms.
Separately, Drivezy is also planning to launch a decentralized marketplace based on smart contracts where it can rent day-to-day objects.