CEO Series

This S'pore Startup Never Lost Its Drive: Made Its $2/Hr Car-Sharing Dreams A Reality

For S$2 an hour, Singaporeans can rent a car and drive to their hearts’ content, thanks to car-sharing firm Tribecar.

Or… just to escape from the heat for one hour, one of the co-founders shared.

“Others make a one-hour booking to send their kids to school or their spouses to work,” 33-year-old Adrian Lee said.

“This made us tremendously happy since [it meant that] we are providing a meaningful service to parents on a school run, and also millennials going on a date in Singapore.”

When it rolled out in Singapore in 2016, it was probably seen as a service that was too good to be true, but many had expected Tribecar to give the incumbents of that time a run for their money.

It was “shaping up to be another rival to traditional taxi operations”, The Straits Times (ST) wrote in 2016.

In June this year, ST reported that Tribecar “has seen its bottom line eroded severely” amidst stiff competition.

The feature, which was put behind a paywall, had alleged that the business was facing cashflow problems as users said they saw “Tribecar cars with expired road taxes”.

Soon after, Adrian released a holding statement, expressing his “surprise” at the piece of news.

According to him, Tribecar posted a record 50% growth in sales to $7.5 million in 2018.

Their membership also grew by 50% in the past year, and they have a fleet of 350 cars, 20% of which are brand new cars purchased earlier this year.

“When Paul and I started Tribecar, we wanted to make transport more accessible to and affordable for everyone in Singapore, striving always to put user demands first,” Adrian stated.

They extended their service to new drivers early this year and have recently launched their service to cater to residents living in BTO estates, he noted.

He clarified that that wasn’t the full story, so we decided to reach out to get a better picture, as well as find out how far Tribecar has come along.

Drive For The Tribe

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Co-founders Paul Tan (left) Adrian Lee (R) / Image Credit: Asian Entrepreneur

Both Adrian and fellow co-founder, 34-year-old Paul Tan, are also co-founders of Drive.SG, a car rental aggregator.

They are graduates of the National University of Singapore (NUS) and have eight years of management and operational experience in the Southeast Asia automotive industry.

Drive came about when internet services like Google and Facebook were “prevalent” in 2011, Adrian told us.

“Yet, local rental businesses were using newspapers to advertise their services.”

They decided to consolidate the rental market onto a single digital platform so potential renters can book a car via the web or an app with one click.

“As car renters ourselves, we saw firsthand how the car rental industry got its bad reputation for [problems like] overcharging and hidden rental clauses,” Adrian shared.

“By being upfront with all our pricing and rental terms, it made the process of renting a car more transparent for all parties involved.”

Now, the business has expanded to Malaysia and Indonesia.

Making the process more straightforward for renters was “just part of the plan”, he continued.

“We digitised SME rental companies that were using literal whiteboards to schedule their fleet with our fleet management software.”

“It was designed as a low-cost SaaS (software as a solution), and more than 20 rental businesses use our software.”

He described Drive as an Expedia for rental cars.

“Expedia could control the hotel experience no more than we could control the experience of transport. We wanted to make transport really convenient and economical for fellow Singaporeans,” Adrian explained.

“The only way we can do that is by getting ourselves more involved! We wanted better control over everything, from the purchasing of cars to the checking-out of the cars.”

Fortunately, he thinks, ride-hailing services offered by Uber and Grab were on the rise in 2015.

They “knew it was going to be a big hit soon” so they came up with a plan to ride on their successes, and their answer was Tribecar.

They believe Tribecar is the first company to offer a car-sharing service for recreational use as well as for commercial ride-hailing uses.

Tribecar had partnered Uber then, to build their renter base.

“Once news got out that we were providing car rental at attractive rates of S$2 per hour, and with the convenience of picking up the cars at their homes instead of having to go to rental offices, people signed up in droves.”

Inaccuracies Are No Tribe-al Matter

In their holding statement, they addressed each of the concerns that were brought up in detail.

The most surprising of all concerns, Adrian wrote, was on the transferring of cars to Car Lite, another Singapore car-sharing firm.

“We genuinely thought it was common knowledge that most car-sharing platforms rent cars that could be owned by other car rental companies.”

In their case, Tribecar brought in five cars from CL Leasing to meet user demands, so when the leases expired, they simply returned the cars back to the car rental company.

“It was not due to the fact that Tribecar could not pay for repairs, as was reported, which is categorically untrue,” Adrian clarified.

He added that they share their car-sharing technology with other car rental businesses because they believe that “it is only through cooperation” with others that they can make a difference in Singaporeans’ lives.

“We share our tech freely, knowing full well that we could lose customers to other companies.”

Adrian admitted that they did actually miss out on renewing their road tax on one occasion due to “human error”.

A staff had incorrectly submitted the wrong month of renewal, he said.

However, he stated that it was incorrect to claim that their cars are not covered by insurance as they have fleet insurance.

So, regardless of road tax status, Tribecar’s fleet of cars will be insured and the issue has been resolved with the fleet owner, he assured.

Besides that case, road tax renewal for the rest of the Tribecar fleet is done through GIRO.

So while payments may have gone through, it takes a few days to be reflected on the Land Transport Authority (LTA) systems, Adrian explained.

“This is merely the way the system works, and it is essential to point out that Tribecar has not been penalised by LTA for any of these perceived ‘lapses’, since these weren’t lapses at all – information just takes a while to be updated.”

He then moved on to address the alleged “corner-cutting” in the maintenance of their vehicles.

“Our priority at Tribecar has always been safety and mechanical soundness,” Adrian shared.

“We use a mix of original and OEM parts, but we have never used ‘spare parts from scrap taxis’ or any other parts that are not up to standard.”

He assured users that their cars are regularly inspected by LTA and only cars that have passed the inspection will be allowed to be rented out.

Separately, when asked how they’ve solved any regulatory issues they’ve encountered, Adrian answered candidly that they are a “very visible car-sharing operator”.

“From the police to the LTA, they all have direct contact to the management,” he said.

“[If] there is any issue that is of concern to the general public, we must be ready to answer their enquiries.”

Adrian admitted that their customer service can be better and promised to work on improving it.

Rounding off the address, he said that it was “heart-wrenching” for the team to hear that the company’s fleet size shrank because of the company’s inability to support a larger size.

He continued, “This is untrue as Tribecar has simply made the conscious decision to get our fleet partners to trade in their older cars for new ones!”

“About three older trade-in cars are typically needed to be put down as deposit for one car, so it is no wonder our fleet is smaller.”

At that time, prices of the Certificate of Entitlement (COE) were low.

Trading in some of the older cars allowed them to provide their users with brand new car models at a similar price point, he explained.

Driving In The Profits

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Image Credit: Tribecar

Behind the detailed holding statement is a thoughtful and sincere team of people who wanted to protect the integrity of their business.

On what prompted Adrian to address the particular ST article so transparently, he told us that it wasn’t something that was done on a whim.

“Ultimately, in a country where free speech is valued, everyone is entitled to their own opinion,” he said carefully.

“Pursuing litigation unnecessarily would defile the very idea of free speech which we hold in great regard.”

As long as readers and our customers know that a story can be spun in both a good and bad way, and measure us based on our hardwork (and our slipups), then it is good enough for us.

Adrian Lee, co-founder of Tribecar

Drive raised S$1 million (about US$788,000 then) in 2014 from Insas Berhad, the investment and management arm of a listed company based in Malaysia.

When asked about their ties to Insas Berhad, he simply answered, “We didn’t raise any funding for Tribecar, but we treasure [their] input and network, and they are one of our valued shareholders.”

Along with the news that they’ve extended their services to BTO estates, Tribecar also announced that they have achieved profitability.

With that said, they also invested over S$3 million in research and development from its profits.

When asked about their strategies that helped the company become profitable, Adrian replied, “There are three reasons for our humble success.”

“First, we work with great rental partners, so we have a good pool of vehicles at reasonable prices.”

“Second, we are techies ourselves, so rolling out the MVP (minimum viable product) on a shoestring budget was easier.”

“Third, we are users too! This point cannot be understated as it took all of our knowledge and experience to create a service that gave us a competitive edge against other brands.”

Adrian believes that understanding the “utility of transport” was also what helped them in their journey so far.

“People needed to get from point A to B economically and conveniently,” he explained.

“Customers didn’t care if it was done using a fancy app or if the car was parked in a dedicated reserved lot.”

He added that they focused on investing in functionality over form, when they were building Tribecar.

If a product costs customers more money and derive no real utility, they won’t go ahead with it.

As a result, their technology keeps adding value to their partners’ businesses.

“[Our] partners are aware that car-sharing is the better version of car rentals,” Adrian shared.

They understood that for anyone to adopt new technologies, it requires knowledge and investments.

The founders “offer [these] crucial ingredients at palatable prices”.

“Without costing their business too much, our partners can use our technology to transform their traditional business into a modern car-sharing service,” said Adrian.

“They can also do this in piecemeal, changing part of their process over time while they get the hang of the new process.”

In a nutshell, Tribecar grows their partners’ top line sales while keeping the costs and overheads the same.

On a consumer-level, as an economic car-sharing brand, managing customers’ expectations takes up a good amount of their time.

“Singaporeans are very demanding customers,” Adrian stated.

“As one of our mentors said, Singaporean have very little tolerance for beta products. It has to be perfect the moment the service is rolled out.”

Like any startup, Adrian pointed out, when they conduct trials, they would clearly inform customers and provide them a form of incentive.

On their plans to scale Tribecar, they shared that the focus is very much still on Singapore as it is their home.

Adrian said, “We really want to make it easy for anyone to get access to transport within five minutes’ walk from their home.”

“We will work with more fleet partners to increase fleet size. We reckon we need a thousand cars – about half of all HDB/URA carparks – to do that, and right now, we are only a third of the way there.”

He revealed that the business does not need funding at the moment, but they may consider raising funds for their overseas expansion.

“Our dreams are modest.”

“(Companies like) Grab and Uber have already made hired transport so easy in [many] countries.”

“We hope to do the same for private transport for residents in the region.”

Featured Image Credit: Asian Entrepreneur

 

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