BlueSG, other car-sharing firms see demand rebound in June, saying more users want ‘safer’ option to ride sharing

SINGAPORE — Demand for most car-sharing firms here surged the moment restrictions on movement and activities were lifted on June 2 and then again in the second phase of reopening last Friday (June 19).

At least one firm interviewed by TODAY said that demand was even higher than the days before the circuit breaker of containment measures began in early April.

Unlike ride-sharing services where a private-hire car driver takes up bookings to shuttle passengers, car sharing is when private car owners lease their vehicles for others to drive, or when a company has a fleet of cars that can be used for short-term rentals. 

Car-sharing companies interviewed also said that they expect a continued increase in demand as more people move about and economic activities resume. They are hopeful that commuters may prefer to travel on private vehicles because they are not so close to crowds on public transport or have to share rides with others in the confines of a car.

However, transport analysts said that public transport will still be more practical and ride-sharing services will be lower in cost when compared with car sharing, adding that car sharing may lead to peak-hour congestion as well.

From April 7 to June 1 when the circuit breaker was ongoing, most car-sharing firms endured substantial losses. 

The revenues of Whizzcar and BlueSG were halved while that of Car Club fell by more than 60 per cent and Tribecar, 30 per cent. 

The firms attributed the fall in demand to more people staying at home during that time. A spokesperson from BlueSG said: “Rentals have dropped... as most of our customers are working from home and only using BlueSG when they really need to go out of the house to buy food, groceries or other essential services.”

One car-sharing firm, Smove, had to exit the market after it began its liquidation process in late May. 

A REBOUND 

During the first phase of exiting the circuit breaker in June though, Tribecar said that its revenue went up by 40 per cent, “even better than before the circuit breaker”. 

Whizzcar saw a 20 per cent increase in revenue, while BlueSG bounced back from its loss with a corresponding 50 per cent jump in rentals.

Car Club — the worst hit — said that the daily weekday usage of its vehicles had “increased significantly” but was not able to provide specific figures yet. 

The only firm that has not seen losses during this Covid-19 crisis is Drive Lah, which offers peer-to-peer car sharing, where owners offer their private vehicles for rent. It said that it has seen a 20 per cent rise in month-on-month revenue in April and May during the circuit breaker, and the number of active users went up from about 5,000 in April to 7,000 in June. 

Drive Lah’s co-founder Dirk-Jan ter Horst said that the increase in demand is due to the perception of car sharing as a “safer option”.

“People are moving away from taxi and ride hailing and prefer to have their ‘own space’,” Mr ter Horst said, adding that private car rentals is a “cocoon” from contact with the coronavirus. 

The other firms likewise attributed the rebound to more customers realising that car-sharing could be a safer alternative than other forms of transport. 

A spokesperson from Car Club said that car sharing is a “potentially safer” form of private transport that is readily available, within commuters’ reach, and that the circuit breaker had raised awareness on the importance of safe distancing.

It is a view shared by Whizzcar, which believes that car sharing offers more privacy and control in comparison to public transport. 

BlueSG said that more of its members have been renting cars for longer periods so that they can run more errands such as buying food and groceries in a single trip.

Some of these car-sharing firms also said last Friday — when the second phase of the circuit breaker exit began — that they had noticed an increase in demand on the day itself. 

Tribecar, for example, said that its revenue went up by 30 per cent that day compared with the past weeks, and that more people were starting their trips earlier in the day. 

EXPANSION, OPTIMISM

In the coming month, despite the uncertainty brought about by the Covid-19 pandemic, Drive Lah will be looking to expand its operations. 

The firm is on a one-year trial with the Land Transport Authority (LTA) that ends in October. 

LTA's private-car rental scheme allows private cars to be leased only on weekends and public holidays, but it has granted permission for Drive Lah to operate on weekdays as well during the trial period.

Mr ter Horst said that the “things look very good” with regards to the trial. The main concern that the authority had was congestion during the weekdays, he said, adding that Drive Lah is using its existing capacity of privately owned cars and not adding cars to the road.

In the meantime, the firm is “in advanced talks to take over a large car-sharing company in the region”. 

Though he declined to name the company it is acquiring, it is understood to be Smove. 

Smove’s founder Tom Lokenvitz could not be reached by TODAY. 

The other car-sharing companies told TODAY that they remain optimistic about the industry’s future here.

Tribecar said that those who use car-sharing services are no longer using it just for leisure, since businesses have started to innovate.

The shift to more deliveries of food and goods as well as private-hire usage has created a “big demand”, it added.

BlueSG said that the pandemic is an “unprecedented crisis” that is likely to put a strain on finances for businesses, organisations and individuals. 

“People may look at possible savings or additional revenues, and therefore the sharing economy is an interesting option in this regard,” its spokesperson said. 

Despite the companies’ anticipation of greater demand, Dr Walter Theseira, a transport economist at the Singapore University of Social Sciences, said that car sharing can never be a “practical mass alternative” to public transport. 

“Most employment, business, and leisure destinations are highly geographically concentrated and people want to go there at the same time as everyone else.

“This creates demand for travel that can't be satisfied with private vehicles alone, unless we can accept massive congestion,” he said. 

He added that Singapore’s “good public transport system and the relatively low cost of taxis and private-hire vehicles” means that car sharing is a less attractive alternative compared to other countries, where longer distances and inaccessibility make car sharing more viable. 

Transport engineering consultant Gopinath Menon said that hygiene will still be a concern for users of car-sharing services, even though it is a private vehicle. 

“There is always the new added fear of who the previous user was,” he said.