Will You Ditch Ride-hailing For Car-sharing?

The typical Malaysian style of commuting has been to own a personal car via hire purchase, which takes between 5 and 9 year to pay off. This was evident in a 2014 report by Nielsen where Malaysia was found to have 93% car ownership, placing third in the world.

We also have the highest incidence of multiple car ownership globally with 54% of households having more than one car.

A more recent report released by the Malaysia Automotive Association (MAA) in 2017 reported a total of 28,181,203 units of vehicles on Malaysian roads at. That’s 0.88 vehicles for every person in the country!

This, of course, is the main contributor to our commonly ranted traffic congestion, especially in the city centre.

To address the transportation conundrum among Malaysians, especially the city dwellers, one of the most disruptive technological advances were introduced: Uber, a ride-sharing service to replace taxis. As technology would have it, it’s always moving on to the next best thing.

With Uber merging with Grab, Malaysians find themselves seeking for new and better transportation options, hence the birth of a new concept known as car sharing.

What is car-sharing?

Car-sharing is a low-cost, short-term car rental option with an hourly rate for use of a car. This service is an ideal option for those who regularly use alternative transportation, those who want to avoid wear and tear on their vehicle or even those who don’t have cars.

Unlike ride-sharing, where a passenger travels in a private vehicle driven by its owner for a fee as arranged by means of a website or app, car-sharing allows you to be a temporary owner of the vehicle you’ve chosen to rent, be it for a day or a whole month.

Is car-sharing picking up in Malaysia?

Car sharing is somewhat a new phenomenon in Malaysia. It is an improved version of the car rental service, one that can be accessed through an app on a smartphone. The vehicles available, whether new or peer-to-peer (where car owners rent out their idle cars on an hourly basis), can be hired for a few hours, a day or even up to a month.

This phenomenon is rapidly catching on in the country, no doubt gaining popularity among millennials since many of them cannot afford to own a car because of the rising cost of living, or who are too environmentally conscious to do so.

Ever since Grab and Uber merged into one, the public now finds themselves having limited to no options when it comes to transportation. Which is why car-sharing services in the country have been accepted with open arms ever since it first reared its head in 2016 with the app Moovby, and has been picking up in interest among the public ever since.

What are the car-sharing platforms available in Malaysia?

Ever since Moovby, the number of car-sharing platforms in the country has multiplied with apps such as GoCar, SOCAR and Kwikcar. Most of these apps are only available in the Klang Valley, with the exception of GoCar, whose services are also available in Langkawi and Johor, and Kwikcar, whose services extend all the way to Sarawak, What’s more, with drivers from Penang, Johor, Sabah and Sarawak already trying to register themselves or their cars on these apps, it’s safe to say that this concept is slowly catching on in the rest of the country.

The app SOCAR is providing a test run of its “door-to-door” service. This means that it delivers the car straight to your doorstep for a flat fee of RM5, provided you are living in Bangsar. According to Leon Foong, CEO of SOCAR Malaysia, users can choose where they want to pick up the car in Bangsar, within certain hours, and are free to drop off the car anywhere in Bangsar, also within certain hours.

Much like the other car-sharing app, GoCar and SOCAR also provide brand-new car fleets for their car-sharing services. SOCAR charges RM8 per hour for its cheapest model, a Perodua Axia, while GoCar charges RM14.90 per hour for its cheapest model, the Nissan Almera.

GoCar’s fleet is supplied by the Mayflower car rental business, which means that GoCar’s fleet of cars belongs to the company as it finds the peer-to-peer model rather messy, with a lot of legal and insurance issues.

GoCar Malaysia CEO Alan Cheah says that at the moment, they have a huge variety of cars, from Nissan Almera to seven-seaters for families and four-wheel drives, which are amongst the most popular cars among the community.

For Kwikcar, which offers up the peer-to-peer car-sharing services, prices vary depending on the type of car chosen. There is a large variety of cars provided, from regular sedans to sports cars with up to 700 horsepower.

Note that there are special rules for those who want to rent the more expensive cars, imposed by the service providers or the car owners themselves. Their services are available in Kuala Lumpur, Selangor, Johor, Penang and Sarawak.

Will it change our lifestyle?

Car-sharing is the most ideal choice for those who want the freedom of driving without the burden of a car loan. However, for those who choose to own their own car, this service could also help them with the loan.

Kwikcar co-founder and CEO Jared Chan, explains that by renting out their cars every weekend, owners of these cars will be able to cover their car loans, adding that this is a good thing as 25% of all millennial bankruptcy is due to unpaid car loans.

Besides giving renters an opportunity to earn extra pocket money, the car-sharing has also been proven to be good for the environment. A study conducted among 363 car-sharing respondents in the Netherlands, called “Mobility and environmental impacts of car sharing in the Netherlands” was done to quantify the effects of car sharing on car ownership, car use and CO2 emissions. The study has found over 30% less car ownership amongst car sharers and that they drove 15% to 20% fewer car kilometres compared to before they were practising car sharing.

According to the study, the shared cars mostly replace a second or third car. With reduced car ownership and car use, car sharers emit between 240 and 390 fewer kilogrammes of carbon dioxide per person, per year. This is between 13% and 18% of the carbon dioxide emissions related to car ownership and car use.

Chan adds that Malaysia has the third highest ratio of cars per household in the world. Some 93% of all households in the country own a car and there are about 11 million passenger vehicles that are stationary for more than 20 hours a day. Thus, having this car-sharing service available for the public in the country is bound to ease up on traffic congestions and even decrease the amount of hassle one has to go through to find parking spots, especially in bustling areas such as Bangsar and Petaling Jaya.

So, how much does it cost?

It will not make sense to use the car-sharing service on a daily basis for long-term, and it is also not meant for that. However, it is a good alternative if you are looking for more flexibility than a ride-sharing service. The cost for car-sharing can be expensive if you are just comparing by trips, without considering the flexibility.

For example, here’s a comparison of cost to travel from Kuala Lumpur to Genting Highlands using Grab and GoCar:

Based on the fare and fee estimation above, GrabCar is still cheaper than car-sharing, which does not even include to cost of fuel. However, the advantage of car-sharing is, you will have the flexibility of using the vehicle the entire day, rather just per trip. If you are going on a road trip and need a mode of transportation to get around at your destination, car-sharing is still better than ride-sharing, and probably cheaper too.

However, it’s important to note that car-sharing will incur other costs such as petrol and parking, which is not inclusive in the rates.

Although it’s good to have more options to commute and travel within the city or country, car-sharing is not a replacement for ride-sharing services. It does not make financial sense to rent on car-sharing on a long-term basis, such as commuting to work daily.

However, it is a great alternative if you are travelling to an outskirt area that may be hard to find other public transportation, or if you are planning an interstate road trip.