Budget 2021: Helped by govt wage subsidies, car rental firm retains staff, hires workers to break into new areas

SINGAPORE — At the height of the Covid-19 pandemic when Singapore imposed circuit-breaker movement controls to keep the coronavirus at bay, car rental firm Lumens Auto’s revenue sank by 60 per cent as private-hire car drivers turned up in the hundreds to return their vehicles.

During the two-month partial lockdown in April and May last year, Singaporeans largely worked from home and went out only for essential activities. Consequently, private-hire car ridership tumbled. 

Lumens Auto acted quickly to keep its business afloat. Its management team took pay cuts of about 20 per cent. 

Coupled with wage subsidies from the Government’s Jobs Support Scheme (JSS), the firm managed to retain all its 50-odd employees. 

Chief operating officer Chiam Soon Chian, 40, told TODAY: “Because of the JSS, for 2021, we are able to pay performance bonuses to some of the staff who helped us weather the storm last year.”

In his Budget statement on Tuesday (Feb 16), Deputy Prime Minister Heng Swee Keat announced that the scheme would be extended by six months for the hard-hit aerospace, aviation and tourism sectors. Industries such as retail, arts and culture, food services, built environment and land transport will receive wage support for a further three months.

Lumens Auto will be eligible for the three-month extension, but will have its wage subsidies cut from 30 per cent to 10 per cent from April to June.

Even so, Mr Chiam is confident that the company would pull through as “the worst is over”, though its earnings have not recovered to pre-pandemic levels.

At the height of the crisis last year, as many as 300 private-hire car drivers returned their rented cars in the space of a month.

To hold on to its remaining customers, Lumens Auto assisted its drivers in signing up for government grants and worked with a logistics firm to help drivers get delivery assignments to make up for lost income.

Despite its own earnings taking a hit, the firm dipped into its coffers to offer drivers a 40 per cent rental rebate during the circuit breaker. It now provides a 30 per cent petrol rebate for drivers who rent its cars.

The firm also ventured into new areas, such as corporate leasing and car trading, after recognising the limitations of the private-hire car rental market.

It enlarged its team, hiring 39 workers to replace those who left and fill new vacancies.

Mr Chiam said that the company, which now has nearly 70 employees, should qualify for the Jobs Growth Incentive, which gives firms that hire Singapore workers wage subsidies of 25 or 50 per cent for up to 12 months. 

Without help from government schemes, Mr Chiam said that the company would have survived but would have had to resort to layoffs. “We definitely would not have been able to retain all our staff, much less be able to expand and increase our headcount.”