The car rental market has undergone a major restructuring in the recent past with various types of models emerging - traditional car rental, car hire, peer-to-peer car rental, car pooling, and car aggregators.
Having said that, car rental is still an unorganized segment, at least in Asia.
Singapore-based peer-to-peer car rental company, iCarsClub claims to be the first in this sector in Asia.
Jamie Wang, co-founder and director of iCarsClub tells us why he founded the company,
"There are 1 billion cars on the road now and this number will reach 2 billion in the next 20 years. However, these cars are only used 8% of the time.
"With peer to peer car sharing, car owners can monetize their free car time by renting out their vehicle when they are not using it. Renters can have access to nearby vehicles that suits their budget and only pay for the time used.
"Also, by sharing the car, number of vehicles on road can be reduced.
"Furthermore with the high cost of car ownership and the growing trend of sharing economy in place, iCarsclub aims to improve the transport system and provide a better mobility solution for commuters."
Key members of iCarsClub include Eddy Zhang – co-founder and CEO, Joya Zhao - CFO & BD, Jamie Wang - co founder and Director, Chengkun Xue – CTO and Liuwei Wei – China COO.
There are 15 other team members handling day to day operations.
iCarsClub is funded by Red Dot ventures, Singapore-based VC that is affiliated with the government’s National Research Foundation (NRF) effort.
The company is looking for Series A funding of USD $3,000,000 by the end of this year.
Q&A with Jamie Wang below.
Describe what your start-up does, what problem it solves and for whom?
iCarsclub is an online marketplace that provides a mobility solution for commuters. We match up car owners who have free car time available and drivers who wish to drive a car when the need arises.
Car owners are able to receive an additional income for renting out their car while car drivers can have access to a wide variety of cars nearby within their budget.
Additionally, iCarsclub’s technology, known as the iCarbox allows keyless entry to the car rented, hence eliminating the need to meet up for keys exchange.
Research done in North America shows that a shared vehicle can take six to 33 privately owned vehicles off the road.
Furthermore, by sharing the car, the vehicle miles traveled by members dropped by 67% and yet the level of mobility and convenience of transportation is still maintained whilst getting access to a wider variety of cars.
This in turn reduces vehicle miles traveled and it will have a huge environmental impact that results in a decrease in green house gas emissions from 39% to 64%.
iCarsclub provides a solution to improve mobility among commuters, improves the traffic conditions in Singapore and also reduces the cost of transportation.
Why should people or companies use your startup?
Car owners are able to earn extra income from renting out their free car time. And, customers who require a last minute transport solution are able to have access to nearby cars at rates up to 40% lower then traditional car rental services.
Also, there is no issue on safety, as all rental cars have to purchase insurance prior to renting. This protects the interest of both car owner and the car renter.
Renters do not have to travel far to collect their car, do not have to go through the lengthy paper work process and do not have to worry about car safety.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
iCarsclub is currently raising awareness through group promotional platforms like Groupon.
Our active blog and regular email to customers help us in engaging customers. We also have partnered with major lifestyle communities in Singapore - Passion Card and SAFRA.
In the near future, we are planning to conduct events, collaborate with other industry partners and green communities.
How did your initial idea evolve? Were there changes/any pivots along the way? What other options have you considered for the business if the original vision fails?
The original idea was to create a taxi booking system that unifies all taxi companies in Singapore. This would create an opportunity to balance the supply and demand for taxis at different locations.
However after further exploration, we found that private cars have a larger potential as they are only used 8% of the time. If the current product fails, we can always turn to be a B2B business that does fleet management for SME or logistic firms.
Where do you see yourselves in 3 years time, what specific challenges do you hope to have overcome?
iCarsclub currently aims to grow to 1,000 cars in Singapore by June 2013 and 3,000 cars by next year. Our expansion to Beijing and Shanghai is underway.
As the car sharing concept is still relatively new in Singapore, iCarsclub hopes to overcome the conservative mindset of car owners sharing their valued possession by demonstrating the benefits of the sharing economy.
Singapore’s current rule doesn't allow car rental during weekdays, that's a challenge for us.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Owning a car is a huge cost. Most of the time the usage of car doesn't justify the cost. We see a gap in this.
Furthermore, the high cost in owning a car in the current market and the high cost of travel alternatives such as car rentals provides an opportunity for iCarsclub to create a platform for car owners and renters.
Video about iCarsClub
As mentioned earlier in the post, the car rental market is still unorganized in Asia. Peer-to-peer car rental poses significant opportunity in the Asian market as there are very few players right now.
On the global scale, we have players like RelayRides, GetAround, Wheelz, and BuzzCar who are into similar business.
iCarsClub says that Singapore has more then 530,000 privately owned cars, and they are planning to get at least 1,000 privately owned cars into their inventory by the end of June 2013.
Currently iCarsclub has about 400 cars listed in their inventory, so achieving a target of 1,000 cars by the year end shouldn't be tough.
The company is currently focusing on the Singapore market and planning to expand to China very soon. This is a logical move considering the population of the country and the number of people who commute daily.
Apart from being a platform for peer-to-peer rental, the company also has a touch of technology in the renting process through their iCarbox system.
This is similar to the technology being used by the US-based Silvercar, where the car system is centrally connected to iCarsClub server that enables the customers to unlock the car without keys, ability to track the location of car, and measure the mileage.
iCarsclub currently generates revenue through commissions. The company charges a 20% commission (on the fare) from each car that gets rented.
We hope iCarsClub has estimated the market size correct and guessed right about Asian owners' willingness to rent their cars. UK-based, now-defunct Whipcar (TLabs here), who was a peer-to-peer car rental provider in the UK recently shutdown their business.
Once the Singapore government liberalizes private car rental sharing model, the opportunity for iCarsClub will shoot up.
iCarsClub was recently awarded the winner of Echelon Singapore Satellite event.
We will have to wait and see the success of peer-to-peer car rental market in Asia.
NB:TLabs Showcase is part of the wider TLabs project from Tnooz.