Entrepreneur

Brink Of Bankruptcy, No Salary For Months - Now Smove Is The Biggest Car-Sharing Service In S'pore

When car-sharing service provider Smove first launched in Singapore five years ago, it only had a small fleet of six electric cars covering a meagre area of the island nation.

Smove was also a very small outfit with only four staff members.

“I was a one-man operation and business development team. Everyone, including myself, had to clean, fix and maintain the vehicles while trying to grow the network of locations around Singapore. Those were the days when we were literally working round-the-clock,” said Joseph Ting, COO of Smove.

At a time when the car-sharing economy in Singapore was non-existent, the team worked hard day in and out, figuring out ways to scale the business.

However, their financial situation gradually worsened over time as they started running out of cash. Some even spent their nights sleeping in the office for weeks trying to save on rent.

We were facing the prospect of bankruptcy and some of our staff hadn’t been paid for months while we raced to make things work.

Despite the seemingly bleak future, the team were still confident that Singapore makes a viable place to operate a car-sharing business.

Although Singapore’s public transport system is affordable and reliable, the team saw opportunities to improve the way people move — a vision that inspired the company name.

COO Joseph Ting / Image Credit: Smove

Short for ‘Singapore Move’, Smove was started in 2013 by Tom Lokenvitz (CEO) and Ting. Both firmly believed that shared mobility was the future, and were motivated by the challenge and potential value that such a service could provide.

Not A ‘Smove’ Journey 

As the sharing economy was still a nascent concept back then, it was very hard for them to gain traction.

Being the pioneer in Singapore’s sharing industry was a double-edged sword. They had to “create [their] own business model without any playbooks or templates”, but this also gave them the flexibility to explore different business models.

Smove electric car / Image Credit: BBC

Smove started off with electric vehicles, but it had to forcibly scrap this idea due to Singapore’s inadequate EV infrastructure.

In 2014, Smove managed to raise US$1.1 million in a Series A funding to grow its fleet. Beyond this fresh injection of funds, the rise of sharing economy in Singapore also helped the company stay afloat.

The following year, Smove pivoted from electric vehicles to petrol engine cars to expand further.

We then went through a crazy scale-up period where we signed a formal partnership with Uber and started expanding rapidly. Our fleet grew from 20 to 200 cars in less than 6 months, and our staff strength increased fivefold.

Today, Smove has expanded further to become Singapore’s largest car-sharing service with a fleet of over 400 vehicles, ranging from Toyota Aquas to BMWs, in more than 110 locations islandwide.

Its team has also significantly grown to about 60 people today.

“Over the years, we’ve made many mistakes but picked up invaluable lessons that has shaped our revenue growth for the better. Even today, a key part of our business is still centred on testing and learning from iterative experiments,” said Ting.

“With our fundraising, we’ve focused our efforts on hiring and technology development to help us grow and scale adequately. We believe that our business is still growing and changing, and we are still far from saying that we’ve [reached our goal].”

Car-Sharing Vs Car Rental

Smove’s shared car / Image Credit: Smove

Smove operates on a “free-floating service”, which means that users can pick up and return the car at any of the designated locations.

This is made possibly by the Smove gadget placed on the car’s front window. All of the vehicle’s data, including its location, is stored within this Smart Hardware Unit (SHU).

It’s also backed by its own SIM card for greater reach, particularly in underground carparks with limited mobile reception or wi-fi.

This full autonomy is what differentiates Smove among its competitors.

To start using the vehicles, users must register an account via the website. While the sign-up process is made as painless as possible, users must still demonstrate that they can handle a car by producing their driver’s license.

Drivers can pre-book the car with the Smove app and lock/unlock the car with a tap of their EZ-link card. It’s a very fuss-free approach that is very convenient and requires minimal paperwork.

Smove also does not charge any membership, deposit, or monthly fees upon sign-up. Depending on the car category and usage type, prices start at $50 for a minimum of 3 hours booking.

A six-hour rental costs $90, while a full-day rental costs $150.

For those who are driving for Grab, charges start at $6 for peak hours and $4 for off-peak hours. Mileage charges are also applicable for this group.

CEO Lokenvitz once described their car-sharing service to Tech in Asia as a “middle ground between the Uber or GrabTaxi kind of service, and the classical rental car businesses”.

“Unlike most car sharing or car rental companies in Singapore where vehicle must be returned to where they were picked up from, our fleet management system has the ability to identify and move to high utilisation areas, ultimately benefiting our customers by optimising vehicle availability and ease of usage,” said Ting.

Moreover, petrol and insurance are also typically included in car-sharing so you don’t incur extra expenses on top of the car usage fees.

Will Car-Sharing Take Off In Singapore? 

Image Credit: Smove

Given the high cost of car ownership in Singapore, car-sharing is becoming a more cost-effective alternative.

The slew of taxes make even basic cars a luxury. Moreover, the certificate-of-entitlement (COE) system means that a car is considered a depreciating asset that will lose its bulk value in 10 years.

The cheap and reliable public transport system in Singapore also contributes to the low car ownership levels.

“According to the Car-Sharing Association in Singapore, a private car is driven less than 10 percent of the day and is parked for the rest of the time,” pointed out Ting.

This statistic backs the concept of car-sharing as it allows more people to have access to a car without needing to own one.

However, the car-sharing can only pick up steam if it becomes highly accessible and convenient to all.

Expanding the total shared fleet can ensure convenience in the form of increased pick-up and return locations, which will help car-sharing take off.

“Our goal is to continue to add on as many locations as possible to ensure there’s always a Smove car nearby, no matter where you are in Singapore,” said Ting.

He adds that the company is working hard to remain consumer-centric by providing the right price points, catering to more use cases, while increasing vehicle options and location accessibility.

Ultimately, Ting trusts that demand will continue to exist for mobility schemes that cost less than full car ownership but offers more flexibility than public transport.

EVs Are Still On Their Business Map

While the firm is yet to be profitable, Ting asserts that funding is not everything.

It matters more to him that they secure a successful business model instead of being dependent on fundraising.

“Unless you reach unicorn status, it will be very unlikely a startup can raise money indefinitely. Investors will call you to account much sooner,” he told e27.

Currently, all of Smove’s funds are channeled into aggressive growth. The company is investing heavily in its platform and operational capabilities in an effort to venture overseas and to explore new lines of businesses.

“We’re also exploring shorter-term rentals as a viable transportation alternative, as well as exploring other modes of transport. As Smove grows, we’re constantly on the lookout for expansions into cities that would be conducive for our service to thrive in.”

Potential markets include Malaysia, Indonesia, and the Philippines, to name a few. Major cities in these regional countries are already suffering from traffic congestion, and car-sharing could be key to reducing overall vehicle numbers.

It also hasn’t given up on its dream of offering up electric vehicles.

“We do hope to return to our roots and offer electric vehicles as an option to our customers as we increasingly see opportunities and sufficient support infrastructure,” shared Ting.

When asked to share a piece of business advice to fellow entrepreneurs, he described the journey of running a startup like a marathon.

“It’s not a get-rich-quick scheme. Founders need to be prepared to make some financial and personal sacrifices to realise their vision,” said Ting.

It’s also critical to stay humble, and have an open mind if you’re proven wrong. If you have the right people working with you, chances are they will tell you when you make mistakes. At the end of the day, it’s the team that makes it [the business] work, not just the boss or founders.

Featured Image Credit: Smove

 

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