Will a car-sharing business work here?

Eliminating the need to purchase a car
by Vernon B. Sarne | Sep 29, 2011

Wherever you are in the world, the costs of car ownership are getting steeper by the day. Apart from the price of the vehicle, there's the steady stream of expenses that come with owning a car, including loan interests, fuel, maintenance, registration and insurance, among others. And if you live in Singapore--where securing a Certificate of Entitlement (required of every car buyer) significantly jacks up the price of your dream ride--you really have to wonder if buying a car is truly worth it.

Turns out somebody has thought of a way to address this. During the Singapore Grand Prix last weekend, we chanced upon Car Club, a car-sharing program through which residents of the Lion City may avail of rented cars through membership. "A car owner faces a long-term loan, high fixed costs and depreciating car value," says the company brochure. "Despite this, a car is typically used only 10 percent of the time. Singapore's public transport can meet the needs of most people. This makes a costly car a nonessential item."

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How does this work?

First, you have to pay a one-time registration fee of 100 Singapore dollars (P3,400), and then an annual fee of S$128 (P4,300) for the duration of your membership. You need to be at least 25 years old (that's correct) to apply for a membership. Either they think people younger than 25 are not responsible enough, or they suspect younger individuals rarely have a steady income.

Then you select from the company's pool of cars, classified based on size and specifications. You pay a separate rental fee every time out, of course. Available cars include the Citroen Berlingo, the Hyundai Avante, the Kia Cerato, the Mitsubishi Grandis, the Mitsubishi Lancer, the Suzuki Swift, the Toyota Corolla Altis, the Toyota Picnic, the Toyota Vios and the Toyota Wish.

To use a Swift, for instance, you have to pay S$10.60 (P360) for the first hour, with a free mileage of 8km. You pay S$4.80 (P162) for every succeeding half hour, with a free mileage of 4km. You also pay S$0.45 (P15) for every kilometer you travel in excess of your free mileage. Fuel and insurance are already included in the usage fees, by the way. And the service is available 24 hours a day.

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This beats taking a taxicab, doesn't it? And it especially makes sense in a place that boasts one of the world's most efficient public transportation systems. But what about the Philippines, where public transport sucks? Do you think a car-sharing business like this can have a market here and actually thrive? And do you agree that the automobile has now been reduced to life's nonessentials?


Car Club Singapore

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