Southeast Asia’s car-sharing platforms ride surge in demand due to the pandemic

Photo by why kei on Unsplash

The pandemic may have emptied the roads of Southeast Asia but it has also ushered in greater demand for car-sharing platforms in the region. Car owners seeking to earn through their idle vehicles and renters, who need a car to commute but are unwilling to splurge, have both flocked to these companies in the last six months.

Singapore-based car-sharing startup Tribecar has seen a 2-3x user growth in the last 12-18 months, its co-founder and CEO Adrian Lee told DealStreetAsia. He expects car sharing to be a mainstay in the city-state due to its restrictions on car ownership. 

Another car-sharing platform, Drive lah, announced a $3.2 million pre-Series A funding round recently on the back of healthy user growth during the pandemic. Both Drive lah and Tribecar claim to be the largest car-sharing player in Singapore.

Then there is seven-month-old GetGo, which claims to have attracted more than 20,000 users with its launch. The new entrant leases cars from Lion City Rentals, a company formerly owned by Uber. These players compete with other car-sharing platforms in Singapore such as Car Club, WhizzCar, CarLite and Shariot.

“There is a huge market [for car sharing] across Southeast Asia. Owning a car is an expense and people are open to sharing their cars to earn extra income,” said Maarten Hemmes, founder and managing director of family office HH VC Investments, which has invested in Drive lah. 

Sensing the opportunity, car rental companies, too, have joined the fray as tourism, a key source of revenue in the past, has dried up. 

ASSA Mobility, a division of Indonesia’s largest car rental company PT Adi Sarana Armada Tbk (ASSA Rent), has rolled out car-sharing services under the ShareCar brand. Meanwhile, in Thailand, ASAP, a unit of SET-listed car rental company Synergetic Auto Performance, has partnered with Haupcar to launch ASAP Go. 

Airbnb for cars

The concept of car sharing has already taken off in the US, Europe, and Australia. According to the latest report by Global Market Insights, the global car-sharing market size is set to reach over $6.5 billion in value by 2027. 

US-based car-sharing startup Zipcar, founded in the college town of Cambridge, Massachusetts in 2000, has grown into one of the world’s largest players with more than one million members and over 12,000 vehicles. In 2013, it was acquired for $491 million by Nasdaq-listed car rental company Avis Budget Group.

Changing consumer behaviour, especially among the younger generation that does not see the appeal or need of owning a car, is seen as a major driving factor behind the rise of car-sharing services. “Our survey showed that 76% of the respondents would not like to buy an asset, they would like to be asset-light,” said Naveen Kumar, founder and CEO of Nityo Infotech Services, the lead investor in Drive lah’s pre-Series A round in July. 

The younger generation also seeks choice. “For example, today, they may like to drive a BMW. Tomorrow, they may want to rent a Mercedes. The entire consumer behaviour is changing,” added Kumar. 

According to Statista, revenue in the Southeast Asian car-sharing segment is projected to reach $237 million in 2021 at a CAGR of 18.28%, resulting in a projected market volume of $463 million by 2025.

Expand Table

Startup MarketsNo. of usersFleet sizeFundingNotable investors
Drive lahSingapore, Australia150,000Undisclosed$4.1mHH VC Investments, Accelerating Asia, Nityo Infotech Services
TribecarSingaporeUndisclosed800--
BlueSGSingaporeNA 650 (Feb 2021)-BlueSG was a subsidiary of French conglomerate Bolloré Group before being acquired by Goldbell Group for $70m in Feb 2021
GetGoSingapore20,000+ (Feb 2021)400 (Feb 2021)--
Car ClubSingapore20,000+300--
ShariotSingapore14,000+ (Apr 2021)250+ (Oct 2020)--
WhizzcarSingaporeNA NA--
Car LiteSingaporeNA NA--
SocarMalaysiaNA 2,000+ (Feb 2020)$40mSocar Malaysia is majority owned by the South Korean conglomerate SK Corp, which also runs Socar South Korea

Raised a Series A round of $18m from KH Energy and Eugene Private Equity in Feb 2020
Trevo by SocarMalaysia, Indonesia30,000 (Jul 2020)NA-Trevo is a subsidiary of Socar and part of Socar’s Series A funding of $18 million went into enhancing Trevo’s offerings
GoCarMalaysiaNA 700 (Aug 2019)Obtained a $121,000 grant from the Malaysian government's Cradle FundGoCar was acquired by travel and car rental company Mayflower in 2016, which is part of the Tan Chong Group run by the family of Grab co-founder Anthony Tan
FluxMalaysiaNA NASelf-funded-
MoovbyMalaysia, Indonesia200,000+10,000+$500KAccelerating Asia, Cradle Fund, Teraju, The Malaysian Global Innovation and Creativity Centre
KwikcarMalaysia, Indonesia45,000+ (Jun 2019)1,500 (Aug 2019)$207.3K (Crunchbase)ScaleUp Malaysia and Cradle Fund Sdn Bhd (Cradle)
ShareCar by ASSAIndonesiaNA NA- ShareCar is developed by ASSA Mobility, a division of PT Adi Sarana Armada Tbk (ASSA Rent), the largest car rental company in Indonesia.
DrivemateThailand45,000+ (Oct 2019)9,000+ (Oct 2019)$2.8mNetSol Technologies, Colopl Next, Isuzu Motors, UNT Group, 500 Startups, 500 TukTuks, Total Access Communication Public Company
ASAP Go with HaupcarThailandNA NA- ASAP's parent company is SET-listed car rental company Synergetic Auto Performance Public Company Limited
ASAP and Haupcar partnered to provide a car sharing service called ASAP Go
Mioto VietnamVietnam1700004500Self-funded-
*This list is not exhaustive-

Car-sharing platforms typically charge on an hourly or daily basis. Users can drive anywhere they want within their booking period ranging from a couple of hours to a few days at a fixed rate. Rates are either determined by the car owners or the car-sharing platform.

These startups charge a commission rate of between 20% and 25%, sometimes with insurance included. 

Other platforms, such as Carro and Moovby in Malaysia, have opted for a monthly subscription model. In the last 12 months, subscribers have doubled, with the average subscription period ranging from six to 12 months for a car, said a Carro spokesperson.

Unlike traditional car rental companies, peer-to-peer (P2P) car-sharing services such as Drive lah do not own any vehicles on their platform and instead utilise available cars on the road. The startup now has more than 150,000 registered users on its platform and claims to have grown its revenue 10 times since raising its first round of funding in late 2019. It plans to expand further to Hong Kong and Malaysia in the next 12 months.

Tribecar, founded by the team that launched car rental service Drive.SG earlier, also onboards car dealers onto its platform. Drive.SG and Tribecar share the same car supply partners. 

The pandemic has resulted in people working from home or staying indoors, leading to under-utilised cars. “Cars are idle 95% of the time, so for owners, it makes sense to put this asset to use. Renters get unlimited access to nearby cars without the cost of owning one,” said Drive lah co-founder Dirk-Jan ter Horst. 

Meanwhile, the comparatively higher cost of car ownership in countries such as Singapore and Hong Kong creates a natural market for car sharing. “We see potential in markets like Hong Kong as it is well-regulated like Singapore,” added Kumar. In Southeast Asia, Singapore, Malaysia and Indonesia report the highest car ownership costs. 

Fleet-based electric vehicle sharing service BlueSG has chosen a different model. It owns about 650 vehicles and more than 1,200 charging points across Singapore. It claimed to have hit one million vehicle rentals in August 2020 and in February this year, was acquired by Goldbell Group for $70 million. 

Proponents of such a model say it provides quick fulfilment during peak demand, while others are cautious about idle assets when demand falls.

Critics point to Singapore fleet-based car-sharing firm Smove, which went bust and exited the market last year after facing financial difficulties. Similarly, Indonesia’s Hipcar was forced to cease operations despite raising funding in 2017 and 2018. 

“There have always been a lot of car-sharing platforms that buy assets (cars) and rent them out. That is a model I do not find sustainable. As a user, you would like to have a car next door or at least in your neighbourhood. And it’s very difficult when you buy cars to achieve that,” said Hemmes.

Markets ripe for car sharing

According to official data and industry estimates, Singapore and Thailand have issued about 1.78 million and 6.17 million driving licences, respectively. Meanwhile, there are 615,452 and 17.3 million passenger cars, respectively, in these two markets. Car-sharing platforms see these numbers as indicative of the market potential. 

In neighbouring Malaysia, too, car-sharing is gaining traction. At least six players – Socar, GoCar, Trevo, Kwikcar, Flux and Moovby – are vying for a share of the pie. 

“There are more than 3,000 people in Kuala Lumpur who want to be a driver, but don’t have a car. So we are looking into that and in fact, around 2% of our user base is ride-hailing drivers,” said Moovby founder and CEO Nik Muhammad Amin, who was previously a software engineer at Grab. 

Founded in 2017, Moovby was conceptualised when Amin was approached by one of his juniors to rent his car for five hours for a university ceremony at a fee. “At that moment, I realised that my car is not the only one sitting idle,” said Amin. When he started Moovby, there was no other P2P car-sharing platform in Malaysia. 

The startup today claims to have about 200,000 registered users, 10,000 registered vehicles and more than 400 models listed on its platform. Moovby has now also expanded to Indonesia, Southeast Asia’s largest market, to diversify its revenue base. 

“In terms of its population and market size, Indonesia is not that far from Malaysia. We were able to penetrate Indonesia. Pre-COVID, we saw at least 3,000 bookings a month,” said Amin. Indonesia contributes more than 70% to Moovby’s total sales.

The company had also forayed into Singapore but was unable to execute its operations due to COVID-19. At the onset of the pandemic, the firm saw its revenue drop more than 70% although it has now bounced back. “We expect this year to surpass pre-COVID times [in Malaysia and Indonesia],” Amin added. 

Car-sharing, however, remains fairly new in Vietnam. Motorbikes remain the most popular mode of transport in the country, which has one of the lowest car ownership rates in the world. According to a survey conducted by Rakuten Insight in 2019, only about 32.44% of Vietnamese respondents owned a car.

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*Stats for SE Asian countries are based on Rakuten Insight survey released July 2019
** US Department of Statistics shows about 90 percent of US households had at least one light vehicle at their disposal in 2017
*** UK data comes from Statista Global Consumer Survey Conducted in the UK in 2020

“We are looking to do motorbike sharing in Vietnam,” said Moovby’s Amin.

That does not mean the firm has given up on launching car-sharing services in the country. As cars are expensive in Vietnam, Moovby sees the potential for the car-sharing model to take off in the market.     

The Vietnamese people are willing to share their cars,” Amin said, citing a market research survey conducted by his firm in Vietnam. 

Launched in 2018, Vietnamese P2P car-sharing platform Mioto hopes to bridge the gap in the local market. “As traditional car rental firms have limited financial resources, they could not invest in a lot of cars, so they had to choose popular car models, leading to limited choices,” said Sơn Nguyễn Quang, co-founder and CEO of Mioto. 

According to Mioto’s estimates, Vietnam has two million private cars and nine million driver licences, indicating a wide untapped market for car sharing.

Roadblocks aplenty

A lack of transparency in the car rental process and inadequate insurance protection — the renter is liable for all expenses related to car damage — have stymied growth in Vietnam. 

“Before Mioto, the insurance industry in Vietnam had never offered insurance by trip. It was always a lump sum within a package,” said Mioto co-founder Phuong Nguyen. “We found that one of the key factors that retain trust between owners and renters is insurance.”

Mioto currently works with two of the top five car insurers in the market to offer insurance on its platform. 

Meanwhile, car sharing has not taken off in Thailand as “car theft is a huge challenge in the country,” explains KK Fund founder and general partner Koichi Saito.

KK Fund invested in Thailand’s car rental marketplace Drivehub as part of a seven-figure Series A round in January 2021, alongside CAC Capital and Toyota Tsusho. Theft protection in Thailand does not cover the cost of replacing the car if the renter or driver is involved in the theft.

Car theft is also quite rampant in Malaysia. “We do a lot of data verification. Our eKYC [know your customer] process is very stringent to make sure the rental process is safe and secure,” said Moovby’s Amin. “We also have anti-money laundering checks.”  

Hemmes thinks certain markets are not yet ready to embrace the model. “Trust is an issue. You can’t just rent out your car to a stranger in Indonesia. That is obviously different from Singapore,” he said. 

“For countries like Thailand and Indonesia, it’s a bit too early. Ultimately, they will catch up at some point in time. It could be five years or 10 years, it’s hard to say. But I think it’s not the right time to go to any of these markets right now.” 

Speed bumps ahead

Some industry observers say it will still take some time for car-sharing models to really take off in Southeast Asia. For one, owning a car is seen as a status symbol in the region. “The Thais don’t like to share their private cars with strangers. They love their cars too much. But that might change in the future. I think the concept of the sharing economy is going to evolve over time,” said Saito.

“We love the P2P car sharing concept but we are carefully monitoring the market in terms of readiness as it is not quite ready yet,” said Thatchai Chuaprapaisilp, co-founder and CEO of Drivehub. “There are a lot of local rental companies in major cities and they rent the cars on a daily basis anyway.”

Despite this, car platforms in Thailand and other Southeast Asian countries have a window of opportunity to grab market share. This is because big car rental companies typically do not serve those who do not have a credit card. “Only a small percentage of local consumers have access to credit cards,” said Chuaprapaisilp.

Platforms like Drivehub work with local car rental companies to serve segments of users often filtered out by big car rental companies by adopting digital payments and utilising national databases and internal credit scores to hedge their risks.

“Most people believe that if you buy a car, then you would not share a car, which is actually not true,” said Tribecar’s Lee. “China is a good example of this trend as companies like used car dealer websites Uxin grew in prominence and car-sharing businesses like GoFun grew tremendously as well. This accompanying growth in car-sharing can be attributed to increased desire for personal mobility, acceptance of digitisation, and openness to try alternatives to car purchase.”

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.