Car Co-op liquidated but will live on as a smaller outfit renamed Car Club
Christopher Tan, Straits Times 13 Mar 10;
NTUC Income has quit the car-sharing business it pioneered here more than a decade ago.
Its move follows two other car-share operators which have closed shop in recent years.
The cooperative-based local insurance giant cited the need to focus on its core business as a reason for liquidating the profitable 13-year-old Car Co-op.
The divestment is another in a series of moves by Income to get out of non-insurance activities since 2007, when leadership at the insurance cooperative passed from Mr Tan Kin Lian to Mr Tan Suee Chieh.
Income has since pulled out from Snow City, fitness centres, a call centre, NTUC Income Travel & Recreation Club and student-care centres.
Car Co-op will, however, live on as a pared-down operation following a management buyout by its former employees.
Renamed Car Club, the outfit has 22 cars shared by 300 members, down from its peak, when it had almost 190 cars and 4,500 members.
Car Club director and majority shareholder Lai Meng, who used to head Income's non-core businesses and who set up Car Co-op, said: 'We believe in car-sharing and we believe it has great potential.'
Going by its last audited accounts, Car Co-op was a little over $500,000 in the black in 2008.
Car-sharing was raised in Parliament on Thursday, when MPs Lim Wee Kiak and Ahmad Magad called on the Government to look into promoting it.
Responding, Transport Minister Raymond Lim said: 'From an overall transport perspective, more people sharing a car in effect increases the use of that car.
'But we recognise that there is a niche market for such services, and we will leave it to private enterprises.'
But those enterprises have dwindled. In 2007, transport giant ComfortDelGro Corp pulled the plug on its CitySpeed car-sharing firm after five years, explaining that falling car prices had made the business less viable.
The following year, Japanese carmaker Honda said its then six-year-old car-sharing scheme had become too big and unwieldy for it to maintain service standards.
The scheme continues today with a fleet of Civic Hybrids on a much smaller scale at Honda agent Kah Motor. From 100 cars and 2,500 members, it now has close to 50 cars and 300 active users.
Kah Motor seems to be managing the downsized business fairly well. It has added other models to the fleet and is looking to set up a new port in Toa Payoh this month, bringing the total to 17.
Observers say there are two main reasons car-sharing has sputtered and stalled. Transport researcher Lee Der Horng of the National University of Singapore said: 'It has much to do with car prices which have been comparatively low in recent years. So the savings you get from car-sharing are insignificant.
'Also, the system is not all that friendly. It is better than renting a car, but not better than having your own car.'
Still, long-time Car Co-op user David Yeo said he will carry on with Car Club.
The technical officer said he sold his car in 2003, when he moved near Aljunied MRT station.
'But occasionally, I still need a car. Car-sharing is more flexible than taking a cab, and I've had fairly easy access. I'm able to get a car more than 90 per cent of the time I book one,' the 44-year-old father of two said.
There are about 200 car-sharing schemes around the world. Interestingly, the IT system many of them use was devised by Income's Car Co-op and German solutions provider Invers more than 10 years ago.
