SINGAPORE (Dec 18): If you have been hankering to drive an electric car, you can now rent one from BlueSG. The subsidiary of French conglomerate Bolloré Group has rolled out a car-sharing programme with a fleet of 80 electric vehicles. BlueSG intends to have 1,000 EVs and 2,000 charging points across the republic by 2020. That will put 90% of the population within 300m of a charging station.
“We see a shift in Singapore from ownership to usage [of vehicles],” Franck Vitte, managing director of BlueSG, tells The Edge Singapore on the sidelines of the launch on Dec 12. “[There is an] increasing attractiveness [in] shared [mobility services such as] bicycle-sharing and car-sharing in the market.” The Bolloré Group has already pulled off successful car-sharing programmes in other countries. In France, its fleet of 4,000 Bluecars has reduced the number of private vehicles on the road by 22,500.
BlueSG may well receive a boost from the government push to cap the growth in private car ownership. In February, the vehicle growth rate will be cut to zero from the existing 0.25%.
“For many years, the growth in car ownership [has been] designed to some extent to accommodate the desire to own more cars as the population and [wealth] grow,” says Walter Theseira, transport economist at the Singapore University of Social Sciences (SUSS). “The reduction signals that even if the population grows, we want a smaller proportion of the population to own a car.”
Singapore currently ranks 55th out of 390 cities on navigation firm TomTom’s global congestion index. The government’s recent move parallels initiatives in other cities, where rising wealth has driven car ownership and led to severe traffic congestion as well as high levels of pollution. London and Stockholm have started to impose congestion charges. Beijing and Athens have driving restrictions based on number plates.
The quest for fewer cars
Imposing restrictions on car ownership and use has its limits, though. “Residents obtain cars because they are able to and want them,” says Tom Cohen, senior research associate at University College London’s (UCL) centre for transport studies.
Public relations manager Alex Cheong, for instance, says he wants to own a car even if the price of the certificate of entitlement (COE) to own a car doubles from where it is now. “In all honesty, no one needs a car. But if I can afford it, I’ll buy it,” says Cheong, who works for global marketing firm Text100. “I grew up in a family that always had a car, and there are certain experiences shared in a family car that you can’t really put a dollar value on — such as how my dad would send me to school every morning.” About 11% of the population own cars today, up from 9% last year.
UCL’s Cohen says cities may see more success in controlling congestion by increasing car utilisation. In Hackney, England, city planners have aimed to ensure every resident is within a three-minute walk from a car club bay. As a result, the percentage of households that owned cars fell from 44% to 35% in the last decade.
Matti Siemiatycki, associate professor at the University of Toronto’s Transportation Research Institute, believes Singapore is headed in a similar direction. “[The country] is transitioning towards shared mobility from individual car ownership, driven by a series of policies,” he says. “The car in the past 75 years has been a status symbol. I think this new generation of ride-sharing and autonomous vehicles is a shift towards a car as a utility. We are at the beginning of a major social transformation.”
The local Car Sharing Association says one shared car could replace 14 private cars on the road. Uber argues that 40% of cars can be taken off the road if ride-hailing becomes the second most preferred mode of transportation after public transport in Singapore.
Shared mobility to drive COE prices
A transition towards car- and ride-sharing could drive COE premiums upwards, as commercial car owners that are using their cars to generate revenues can afford to pay more. Lai Yeu Huan, senior portfolio manager at Nikko Asset Management Asia, says demand from ride-hailing companies Grab and Uber has been driving COE prices for the last two years. “If they expand, there will be an increase in COE prices,” he says. He estimates that the two companies have added roughly 20% to the demand for cars in the last two to three years.
But Theseira of SUSS argues that ride--hailing providers could also help reduce the volatility in COE prices created by individual buyers. He explains that heavily used private hire cars are likely to be scrapped, rather than sold on. “It is unlikely that any private owner will buy a car with 400,000km clocked, for instance,” he says. That means a regular supply of COEs will go back into the pool and be available for bidding. By comparison, individual car owners sometimes choose to renew their COEs or resell their cars with the COEs attached. That can lead to occasional dips in COE supply, resulting in price spikes.
Theseira also thinks commercial car owners will be sensible about the price they pay for COEs to preserve profitability. Grab currently works with more than 50 fleet partners — car rental companies that rent out cars to those who want to drive for Grab. Uber owns Lion City Rentals, which rents cars to drivers. It recently announced a deal to sell 51% of Lion City Rentals to Singapore’s largest taxi fleet owner ComfortDelGro Corp. Both Grab and Uber also allow individual car owners and taxi drivers to offer car hire services on their platforms.
When asked for comments, Grab says it has no plan to “aggressively” expand its fleet. Its head of shared mobility, Ngiam Xin Wei, says it will work with its partner SMRT to build a bigger pool of commercial vehicles. It has signed a partnership for exclusive access to SMRT’s taxi and car fleet management capabilities.
Meanwhile, Uber says there is already an oversupply of vehicles in Singapore. “If ride-sharing can scale, it can reduce the number of cars in the city,” says Tricia Frank, head of public policy for Singapore. In a white paper released by Uber earlier this year, it says that Singapore needs only 50% of the private cars on the roads today to serve the entire population.
Good times for second-hand-car market
After the freeze on vehicle growth was announced in October, COE prices for small cars rose 13.2% to $47,112 in the November bidding exercise, while the COE price for large cars increased by a steeper 15% to $57,414. Mayfair Motoring, a used car dealer, says it has seen a 30% jump in its sales. “If the zero growth continues, I think we will continue to see good [demand],” says Mike Wee, director of Mayfair Motoring.
New-car dealers are less excited. A spokesman for Chua Automobile reckons there will be less interest in new cars in the current market. The company is trying to enter the rental business instead.
Meanwhile, car-sharing services are expanding. Singapore’s largest operator Car Club has launched a “regional passport” that allows its members to use its cars in any country in which Car Club or its partners operate. “We are going into an asset-light model with selected partners,” says Gary Ong, managing director of Car Club. “Some of the models could include revenue-sharing or co-marketing with car manufacturers.”
Regardless of how convenient car-sharing becomes, there will be people for whom owning a car is worth even a hefty price. Ian Gregory Tan, who makes video games for a living and shuttles across the island to manage his three game development start-ups, is one of them. “I have seen places such as Jakarta and Los Angeles, where there are no measures to keep car numbers down. It is a nightmare of snakes made of rubies and diamonds,” he says. “I am okay with spending more so the roads are clear enough to merit owning a car. And if I have to work harder to afford one, that’s all right.”
