[silverado]

This is an excellent idea for people who want a 7 seater car on rare occasions but for 90-95% scenario hatchback does the work. This model can be used to have your second rarely used car at a very low cost.

[octane_100]

Went through the FAQs. From what I understood,

a. Prorata will form an LLP (probably for each car with the 12 co-owners as partners) and buy the car from the entity.

b. They charge min 20k per user per annum which translates to min 2.4 LPA per car towards LLP compliance

c. If you want to sell your fractional ownership, they charge 15% of the deal amount as transfer fee.

[wheeledwanderer]

This is good idea for NRI's who will come to India for a month on holiday i.e. mostly Gulfies. When we come on holiday, we need a car to drive and this option could translate into driving in style. However I see that most Gulfies (especially with family), take holidays during same months i.e. July, August and December most of the time. This is when the problem would start is what I anticipate.

[UD17]

Originally Posted by CarNerd

Parotta Car? First tell them to keep a name that's easy to pronounce.

They want to name is like 'Paratha' which also take approximately 12 ingredients to make. I guess someone during company incorporation misspell the name.
Moreover dealing with the complexity of such business model is huge, there would be someone who would for sure spill the curd (Raitha failana).

[SakshiBansal]

Hello to the beautiful community of Team-BHP,

My name is Sakshi Bansal and I am the co-founder & CMO at Prorata Cars.

Firstly, I would like to thank @speedmiester and the entire community for showing interest in knowing more about fractional car ownership.

Let me introduce our concept properly because I see a lot of misinformation being circulated in the group.

We are India's fractional car ownership platform where a group of 4-12 people can co-own their favorite cars through the help of our platform.

Our concept serves your occasional and experiential needs only. So, we are targeting people who have vehicles for their daily commute.

How it works-

1. We form a group of 4-12 people interested in owning the same car from the same residential society.

2. The car will be a white plate car parked at your society for everyone's convenience.

3. We create an LLP (Limited Liability Partnership) and all the co-owners are shareholders of that LLP. So, the registration of the vehicle is done in the name of the LLP.

4. Afterwards, all the co-owners use our app to reserve the car whenever they need it. We open the calendar for the entire year so that you can reserve your special days in advance. (There's no chance of conflict with the other owners because you don't need to communicate with anyone to take the car out. All you have to do is reserve the car in advance).

5. We sell 12 tickets with one car and one ticket gives you 30 days of usage per year. One person can buy up to 3 tickets and use the car for 90 days per year and still save 75% of the money.

6. Prorata is an asset management company, we take care of the maintenance, servicing, insurance & daily cleaning of the car. So, that none of the co-owners have to worry about it.

7. After 5 years, we sell the car and all the co-owners get 40%- 60% of their investment in the car back.

Why Fractional Car Ownership/Prorata?

1. It's 5-20 times cheaper than renting a car.

(Let's take an example- If a person buys 1 ticket for Mahindra Thar, they have to pay Rs 1.5 lakhs as a one-time investment. And our AMC charges of Rs 15k per year for 5 years i.e. Rs 75k for 5 years. After driving the car for 150 days over 5 years, we sell the car and you get approx. your 50% investment back i.e. Rs 75k. It means you are only paying Rs 1.5 lakhs to drive Mahindra Thar for 150 days which is Rs 1000/day. When compared with renting, you'll easily get the same car for more than Rs 5k/ day with bad quality and inconvenience.)

2. It's convenient because the car is parked in your society.

3. It's a white plate car that brings a sense of pride while driving it around.

4. You get to fulfill your dreams of driving luxury and ultra-luxury cars at a fractional cost.

5. The car is a newly bought car with people entering into it with an ownership mindset. Plus it's maintained by us keeping in mind the high hygienic standards.

6. If one person creates an accident, other co-owners are protected from it as everything is logged into our platform regarding who was using the car and when. (We have strict guidelines for the users who decide to misbehave with the car).

Now, I'll answer some of the questions which I haven't answered above-

Originally Posted by LordSharan

1. Who owns the car overall?
2. 12 people together vying to book the same car can lead to lot of conflicts, especially during peak holiday season.
3. 12 people driving a car together will lead to lot of maintenance problems.

Thank you LordSharan for your question-

1. All the co-owners do. We create an LLP for individual cars and all the co-owners are shareholders of that LLP. For example- If you decide to buy 1 ticket for Mahindra Thar, then you are an 8.33% shareholder of the LLP.

2. Correct! That's why a co-owner who has bought one ticket can book up to 10 days of holidays/ weekends out of their 30 days of usage credit per year. This is to make sure all the co-owners get a fair share of holidays/weekends.

3. Prorata takes care of the entire maintenance, servicing, and insurance of the car. So, that none of the co-owner has to worry about it.

Originally Posted by aniyo

Say I have booked the car for October and the guy who booked for september crashes the car and it is under repairs. In that case how will this be managed.

Hello Aniyo,

Thank you for your question.

The person who has done the accident will have to borne any charge that is not covered by the insurance, and the person's usage credits will be deducted from his account and will be given to the user who couldn't user the car due to its unavailability.

Originally Posted by jigar1791@gmail

We Indians (of a major chunk of car-owning universe) still consider owning a vehicle as an aspiration, not as a necessity, unlike in the West/Mid-East. There's a lot of emotional attachment involved during the entire ownership journey from the purchase to the sell-off.

Wherever there's attachment involved, the idea of co-owing/sharing is knocked off from the equation for a vast majority of us (if you don't agree, try lending your car to someone not so well-known to you for a fortnight!).

Hello Jigar,

I 100% agree to the point. Any vehicle purchase in any Indian household is an emotional purchase. However, we are here to solve your occasional and experiential need only. The car you call your own is your daily commute, emergency need vehicle.

We are only solving the purpose of your once in a while need of road trips, visiting relatives house, and enjoying your special days driving the car of your dreams.

In India, it's very expensive to buy any luxury vehicle in comparison to the U.S. But now you can do that with the help of our platform by investing in a car fractionally.

Originally Posted by Nilesh5417

I think this idea of car sharing with 12 people at some fixed period in a year is just too messy! Why spend if you can't get it when you want it for the period you want. Not much flexibility for what you pay i feel.

Hi! Nilesh

I understand the space you are coming from. But the maximum people who can co-own a car are 12 and minimum is 4. If one has higher need of the car can buy 3 tickets which will give him/her, 90 days usage of the car per year and higher flexibility of booking whenever one need to. Buying 3 tickets will still save you the 75% of money.

Originally Posted by theAutomaniac

I would never invest in such a model unless it is an arrangement among my friends.

Hello! Automaniac. I understand your concerns. But this is where we come in between and you need a platform like us. Because all the reservation of the car is done online. You do not need to interact with any co-owner before taking the car out. Any legal, accidental, insurance issues are also handled by us.

So, all one has to do is enjoy the car for the pleasure and leave all the headache to us.

Let me know if you would like any more information about any specific point.

Thank you to the moderator and admins for letting me be a part of this beautiful community.

Regards,
Sakshi

[speedmiester]

Originally Posted by SakshiBansal

Let me know if you would like any more information about any specific point.

Thank you to the moderator and admins for letting me be a part of this beautiful community.

Regards,
Sakshi

Thanks for sharing your perspective as a Co-Founder.

Can you share info on how many customers have signed up so far? How is the response so far.

This might work only in large residential apartment complex. I live in a apartment complex with 130 apartments, it will be mighty difficult to conjure up 12 like minded individuals.

It might help if this implemented among friends and family with Prorata taking care of storing the car.

[fhdowntheline]

I have a few questions around the points mentioned by the Co-founder.

1) When you say that the group of owners form an LLP to purchase the car in the name of the group, who does this group purchase the car from ? From Prorata ? Or does Prorata act as an intermediary with the car dealership?
2) You mentioned about strict guidelines about misuse of the car. Are these guidelines to be mutually agreed by the group of owners at the time of the LLP ? Since they are the actual owners, how would Prorata be able to enforce ? As an example, if some owner indulges his/her teenage kid to take a quick spin (while being ineligible for driving) , how would disciplinary measures be enforced ? Or is it something to be decided by the group internally. On the same lines, do they decide who actually gets to drive the car, as in only designated members from each family are allowed to drive?

3) How do you enforce the 5 year ownership rule if the owners decide to retain the car for longer period ? Is Prorata also a co-owner within the LLP ?

4) When you say that Prorata takes care of insurance and servicing, does the group of owners enter into an agreement with Prorata for the same ?
5) Why should the owner who gets into an accident lose money (over and above insurance cover) as well as usage credits especially if the owner is not at fault ? Normally we all take up Return to Invoice insurance . Can this not be done for this kind of fractional ownership?

Thanks!

[OctYFAN]

I don't know if many agree but maybe people could co-own something like an exotic Porsche or Ferrari. The kind that are driven very rarely and could actually be a nice way for people to be able to afford dream cars. Not many use their supercar for more than 30 days in a year and I think it would work out fine. Moreover supercars are owned by enthusiasts so not much to worry about people hurting them.

It just won't work with regular cars though. Their usage will probably be much higher than 30 days a year and since people pay a part of the price of the car there could be bitterness between owners and other issues like:

What if an owner wants to leave the program.
Who gets the car at the end?
Who takes charge if there is an illegal accident such as a minor driving?

The possibilities and issues are endless. It'd probably work with a maximum of 4 people and no more than that.

At the end it's a very niche business model. They would probably shut down in a few years.

[rt363]

Hello Sakshi

I have just a question.
As far as I understand, unless you have a yellow number plate, insurance companies can deny your claim since there are multiple drivers involved. Have you taken a clear, legal opinion regarding the same.

On another note, this is a concept that almost all petrol heads have discussed with their close groups at some point in their life. Good to see you guys implementing in the real world.

[d.j]

Hi, am sorry but I yet can’t understand what net value is this model bringing to the marketplace, fractional ownership = fractional rights, so “mathematically” the equation evens out, what’s the real benefit customer would derive out of it. all said, sorry if this is lame - I probably may go for something like it, when it lets me have the car, say at least one day in a week, a car which I love but do not want to invest as it’s not a suitable daily drive for me, nor wish to keep it standing 5-6 days a week, say a car like Thar or a Hilux. 30 days in a year is lot uncertainty and unprogrammed time, 7 co-owners - each gets to drive 1 day a week.

Regards/Dj

[rageshgr]

Looks good on paper. But when you think about it. You get the car for only a month overall. So what about the remaining 11 months? You ll need to find some other solution for those out station trips anyways then. Also. Let’s say you buy a fortuner for 4 lacs per person. You are paying 4 lacs for 30 days? That’s 13k per day. I guess self drive rentals may work out cheaper and simpler. May be it was 3/4 then there could be more value with this fractional ownership.

[cka]

So this company got featured in Shark Tank and got investment as well. What are other people seeing that we are not able to see.

[N.A.GTC]

Originally Posted by rt363

Hello Sakshi

I have just a question.
As far as I understand, unless you have a yellow number plate, insurance companies can deny your claim since there are multiple drivers involved. Have you taken a clear, legal opinion regarding the same.

I'm not related to the company, but to answer your question: they create separate LLPs for each bunch of people who share a car. So, the car is owned by the partnership firm, and each of the partners get to drive it.
If a partner of a partnership firm drives a car, that's still private use, and not really sufficient for insurance companies to deny your claim.

On the other hand, it would create hassles for people who need permissions to become partners at firms (government servants, e.g.) or who are not permitted to enter into any partnership arrangements/LLPs by professional bodies (Bar Council restricts advocates from entering into any partnership with non-partners, for instance).
Then there's the whole issue of privacy, with your name becoming easily searchable on the MCA website (and people can also identify who else you share that car with).

As @cka said, what are other people seeing that we are not able to see?

[EDIT: Just realised we're in a two year old thread. Oops.]