Car-Sharing – An explanation

Car-Sharing – A Brief History

In the late 1940s, a simple idea was introduced in Switzerland: “Why buy a car, when you could share one with other people?” Efforts were made to bring the concept of Car-Sharing to life but failed. The world simply wasn’t ready for it.

It took almost 40 years for the idea of Car-Sharing to come full circle in Europe. In 1987, the first company to offer Car-Sharing service was established in Switzerland.

Not long after that, Germany caught up with its Swiss neighbour. America and Canada were next.

In the mid-1990s, Mr Mah Bow Tan, the former Minister of Communications, introduced the concept in Singapore. Given the country’s dense land use, Car-Sharing, not surprisingly, was highly regarded by the Singapore Government to be an effective alternative transportation solution.

Singapore’s oldest Car-Sharing operator began life in 1997 as NTUC Income’s Car-Sharing cooperative. In 2010, when NTUC decided to put a stop to the pioneer Car-Sharing service, Car Club was bought over by former employees and continued operations under its current name, Car Club. It has 200 cars and plans to increase this to 300 in a year’s time.

Car-Sharing – An Explanation

The principle of Car-Sharing, to put simply, is: To offer individual access to private vehicles without the cost of ownership.

Car-Sharing companies such as Car Club own a fleet of vehicles and they pay for all expense to maintain them. Car-Sharing stations are conveniently located island-wide with reserved parking lots, often in multi-storey carparks at HDB estates, shopping malls, commercial buildings or MRT stations.

Car-Sharing might be confused with short term car rental but the two concepts operate differently.

Car Club members have access to a car at any time they need,not just business hours. They are equipped with an electronic card or a key fob that can unlock a wide range of Car Club’s vehicles at ease.

Members only pay according to their usage, whereas car rental companies charges a daily or weekly rate.

Currently there are three types of Car-Sharing: station-based, free-floating and peer-to-peer.

Car Club operates as a station based Car-Sharing service.

Currently, there is no free-floating Car-Sharing entity in Singapore. Operators offer a round trip service. Customers are expected to pick up and return a shared car at the same station.

Peer-to-Peer (P2P) Car-Sharing companies, on the other hand, do not own the vehicles but act as a platform to list cars from individuals.

Car-Sharing – Present and Future

So why is Car-Sharing increasing in popularity?

For one reason, many people are not persuaded to be burdened with long term financial commitments on a depreciating asset (a car); especially in Singapore, where high costs of car ownership may not be practical over time.

A recent finding by Car Club shows that the cost of buying and maintaining a category A level car in Singapore could cost as much as $2,178 a month. Even more surprising, data collected shows that most cars are under utilised and sit idly in car parks 80% of the time.

Due to the influence of COE, cars in Singapore have a fluctuated depreciation. Car owners often joke, “The moment you drive your new car out of the showroom, it depreciates 10-20%”.

Unless you have a need to drive frequently, owning a car might not be getting your money’s worth. Many people are starting to rethink about their travel needs versus the costs of car ownership.

Car-Sharing is most effective being used as a mode to fill the gap between public transportation for private vehicles. For certain trips, people could take public transport to the nearest Car-Sharing station and then continue their journey with a vehicle. For shorter distances, they could walk, bike or get a taxi. But for urgent or even routine activities in between, a shared vehicle is a better option.

A simple example: if you need to get from point A to point B, which is not conveniently accessible by buses or the MRT, Car-Sharing comes in very handy. For occasional needs such as transporting bulky objects, a family outing, entertaining an out of town guest or even meeting a client, Car-Sharing would be a great option because it works just like your own car.

The on-demand nature of Car-Sharing: “A car is there when you need one and you only pay for your usage; petrol, insurance and maintenance are taken care of” is what keeps a lot of Car Club members stay for more than five years.

From the environmental perspective, Car-Sharing attributes to having less cars on our roads, and it also means lower CO2 emissions to help bring about a better future for our planet.

According to recent statistics from https://data.gov.sg/, there are 1,956,336 qualified driving license holders in Singapore. The market for Car-Sharing in Singapore soon attracts a lot of large companies and start-ups.

Over the years, with a vast increase to 95 Car-Share stations and fleet of 250 cars islandwide, Car Club has attracted many of these individuals and also companies to embrace the Car-Sharing concept.

So what’s the conclusion on Car-Sharing? You save money, yet still have access to a vehicle whenever you need one, no more hassle of maintenance, insurance and parking; you are even helping the environment. No wonder why after the Swiss started on Car-Sharing, the world hasn’t looked back since then.

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