I’ve always wanted to make car sharing possible – there are two ways to go about it.

First method: I would announce my travel plans and pick somebody going the same way as I am. In return I will get paid a token sum to ferry my passengers. I call this “Taxi style”.

Second method: I rent my car out for profit. In short, it’s plain old private car rental. This is actually working in the US, see RelayRides.

One problem with private car rental in Singapore is legislative restriction. At present, private car rental is only allowed on weekends or public holidays.

The other problem is insurance coverage. Both methods of car sharing I described are classified as using the car for hire or reward. Hire/reward is explicitly prohibited on almost, if not all, private car insurance policies.

Believe it or not, I called almost every insurance company in Singapore trying to see if rental coverage was possible. The answer was NO. Some did cover rental fleets, but the fleet size had to be considerable and it had to be a business.

iCarsclub collaborated with DirectAsia to get the insurance problem resolved, so it is really very interesting.

I decided to conduct an experiment.

I signed up as a car owner. I did some research, and listed my car up at a very reasonable rate – $7 per hour, or $55 per day.

My friend wanted to rent my car for the weekend, so he had it for 3 days on this long weekend (May 24 to May 26).

The catch is this – fuel costs are borne by the car owner. iCarsclub in return charges the renter for mileage ($0.30/km). The renter also needs to pay for insurance coverage ($0.40/km).

At the end of the rental, the bill came up to $326.83. The breakdown as follows:

  • Mileage traveled: 232 km
  • Booking fee: $2.00
  • Rental fee: $165.00 ($55/day x 3)
  • Mileage charges: $69.60
  • Insurance: $86.80
  • GST: $3.43

iCarsclub takes a 20% commission from the rental fee.

Insurance premiums are paid to DirectAsia.

As a car owner I would only receive rental + mileage = $201.60.

I also had to pay for the fuel, estimated to be about $60.

On top of that, I have to pay for the SIM card in my car tracking device. That costs $39/mth.

The result?

  • Car owner earns: $102.60 (31%)
  • Petrol company earns: $60.00 (18%)
  • Telco company earns: $39.00 (12%)
  • Insurance company earns: $86.80 (27%)
  • iCarsclub earns: $35.00 (11%)
  • Government earns: $3.43 (1%)

It seems like businesses are the ultimate winners here. The owner actually receives less than a third of the amount.

As a renter, there’s no price advantage. My car is already priced very low. My friend could have rented a similar car from a rental company for equal or less without worrying about the mileage based charges killing him.

And because of the fixed mileage charges, it gives the renter no incentive to save fuel. He could go full throttle on the car all the time, or even abuse the fuel card.

As a car owner, I am not sure if the amount risks I expose myself to would justify the $100+.

Every car owner would have to sign a 2-year contract with iCarsclub, so my car would remain in their inventory for another 2 years. There is also a refundable deposit of $300 I had to pay. Breaking the contract would forfeit my deposit.

Right now I think the pricing scheme needs to be tweaked. I am trying to get in touch with them to see how it can be improved. I am also hoping LTA’s announcement to liberalize private car rental on weekdays would come true.

I am not discouraged yet and will continue to rent my car out to see how this whole scheme works out.