A Look At Why Car-Sharing Demand Has Surged In Singapore
The Covid-19 pandemic has resulted in increased demand for a wide assortment of goods and services. For example, e-commerce has experienced a huge boom as many Singaporeans have chosen to shop online instead of going to physical stores.
Carsharing is another sector that has seen strong growth in demand. These are private owners who rent their vehicles for others to drive, or when a company has a fleet of cars that can be used for short-term rentals.
Carsharing companies saw a surge in demand as the driving restrictions were lifted, according to a report released last year.
During the first phase of the economy reopening in June 2020, Tribecar’s revenue grew by 40%, while Whizzcar saw a 20% increase. On the other hand, BlueSG bounced back from its loss suffered during the circuit breaker with a 50% increase in rentals.
For Drive lah, it saw a 20% increase in monthly revenue in April and May during the breaker, and the number of active users rose from around 5,000 in April to 7,000 in June.
In addition, Statista states that the penetration rate for users of ridesharing services is 6.8% in 2021 and is expected to reach 8.5% by 2025.
While the carsharing boom is clear, will this demand be sustained over the long term?
Carsharing may not be the most affordable option
One of the main draws of carpooling is that it is touted as the most affordable transportation option in Singapore.
It removes the long-term liabilities associated with a depreciating asset like a car. This is especially prevalent in Singapore, where the high costs of owning a car may not be achievable over time.
In addition to paying for the upfront costs of a car and its Certificate of Eligibility (COE), car owners can expect to pay an average of S $ 1,591 per year for auto insurance, S $ 621 for cars. maintenance / upkeep costs, S $ 742 in road tax and S $ 2,434 in gasoline costs each year.
A recent finding from the Car Club shows that most cars are underused and sit idle in parking lots 80% of the time. Drive Lah’s research further confirmed that Singapore logs 11,520,548 idle car hours per day.
Unless you drive regularly, it is definitely a more economical option for Singaporeans to use the ridesharing services.
However, we also have to take into account public transport. Singapore has a very well connected public transport system, which is more affordable than renting a car on carsharing platforms.
In addition, the country also has a plethora of driving options, from Grab to Gojek, and even small players like TADA and Ryde. Here is how the different carpooling options in Singapore correspond to public transport:
According to the table above, carsharing is the most cost-effective option, especially with companies like Shariot offering extremely competitive rates starting at S $ 1 per hour.
One problem, however, is that many carsharing platforms require users to pay a monthly membership fee, a registration fee, or bear the cost of gasoline.
Convenience as a draw
Singapore is an extremely fast-paced city, and convenience is something highly valued by most Singaporeans.
While carpooling can be affordable, it’s not the most convenient option. In fact, it will probably take longer than booking a taxi or ride-sharing service.
For example, even though Tribecar has the most diverse rental vehicle fleet, such as motorcycles, vans and trucks, users must return the car to the exact parking lot where they picked it up. Thus, if the user does not collect the car from a parking lot near his home, he should do everything possible to return it at the end of the rental.
Electric carsharing company BlueSG adopts a more convenient “point A to B” model, in which users do not have to return the car to the same place where they picked it up. However, they will still need to return the BlueSG car to a designated parking lot.
Additionally, even though the company currently has a fleet of 667 shared electric Bluecar vehicles and 1,487 charging stations, finding a car is still difficult, especially in areas of high demand.
For Drive lah, it is the first peer-to-peer carsharing platform in Singapore that allows private car owners to rent their vehicles. To collect the car, you must meet your host at a designated pick-up point and after the time is up, you will need to return the car to your host.
Carsharing works as a short-term solution
It seems unlikely that Singaporeans will use carsharing as a frequent form of transportation such as trains, buses and even ridesharing services.
According to transport economist Walter Theseira of the University of Social Sciences in Singapore, carsharing will only work well in countries where “the costs of car parking are low and the costs of drivers are high.”
However, in the case of Singapore, public transport and even carpooling services are relatively affordable, making carpooling a less attractive option.
Carsharing demand is likely to decrease as Singapore’s borders gradually open up and Singaporeans can venture abroad again.
In the meantime, although Singaporeans may occasionally use carsharing services for family outings or special long-distance trips, it is unlikely to become a daily mode of transportation.
Featured Image Credit: GetGo
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