Entrepreneur

[MCO] These 3 Car-Sharing Startups Pivoted Since No One Can Have Leisure Road Trips Anymore

Author’s Blurb: I’ve always seen car-sharing as something that people mainly use for long distance travels like road trips for fun or balik kampung. Therefore, with the MCO in place, I wondered how car-sharing startups would fare, since the road blocks and 10km limitation on travel would essentially render car-sharing startups irrelevant for now.

Prior to the MCO, the bulk of customers for car-sharing startups were everyday users, be they working professionals or travellers.

Now all that’s changed, with GoCar’s CEO Alan sharing that they’ve seen over a 65% decline in the utilisation of their vehicles.

For KLezcar, COO Shahril told Vulcan Post that they’ve suffered a 90% drop in customers, while CEO of WAHDAH, Raden said that they received cancellations and refund requests for amounts of up to RM100,000 and more, all within a few hours after the first MCO announcement was made.

This probably comes as no surprise to anyone, as a majority of these startups’ users were travellers or working professionals, all of who aren’t driving around much anymore.

However, overseas car-sharing companies have repurposed their idle vehicles for various initiatives under essential services, so I asked if the same was happening in Malaysia.

Alan shared that GoCar is renting out its vehicles for business owners and delivery staff at RM30/day, and it’s also partnered with Shell Malaysia to provide free car usage and petrol vouchers to healthcare frontliners.

A GoCar fleet assistant wiping down the cars to ensure hygiene / Image Credit: GoCar

Meanwhile, the remaining users of KLezcar’s vehicles are government servants or part-time delivery staff.

Raden said that while it’s a good option, they’re not considering it due to the hassle of vehicle maintenance during the MCO, especially because of the limited movement and connectivity.

Figuring Out Cashflow Challenges

In terms of challenges brought on by the MCO, cashflow and finance management are undoubtedly some of the biggest ones.

Alan shared his strategy for this, “The key focus now is to stop cash from flowing outwards by monetising existing inventory and only ordering when you have demand, negotiate with certain partners on delayed or partial instalment payments, request for a full or partial waiver on property/location rentals, stop all non-time sensitive purchases, and last but not least, freeze most of the hiring for now unless it’s essential to your company’s growth.”

But what is he doing with existing inventory?

“Some are sunk costs which require us to focus on alternate advantages of those services, so we restructured our key metrics,” he added.

Since revenue is no longer key, GoCar is looking into the value for existing users, acquisition of new users (especially ones who aren’t aware of car-sharing), and their GoCar for Delivery initiative, which supports business owners and deliverymen while making full use of their inventory.

Raden told us that WAHDAH’s biggest challenge is in making the right decision for business sustainability in terms of cost management, manpower restructuring, and even business pivots, if necessary.

“To overcome this, we had discussions with staff, customers, partners, and suppliers to get crucial information before making the decision.”

Utilising What They Have

Over at KLezcar, Shahril said that they’ve also rolled out a new initiative called EazyMart, which is an online grocery service with same-day delivery.

“Through EazyMart, we keep our business afloat until the car rental business picks up again. We saw a big opportunity in EazyMart and we will keep this service growing, which actually uses the same KLezcar ecosystem as before.”

WAHDAH, on the other hand, is collaborating with Bplaz Sdn Bhd, the startup arm of Bateriku.com, an automotive battery manufacturer and direct retailer.

Bplaz owns and operates a platform that offers products and services related to car maintenance such as battery replacement, spare parts, towing services, etc., and is currently experiencing a spike in daily orders to the point where they’ve had to decline a few.

Therefore, WAHDAH stepped in to help smoothen the acquisition and delivery process, effectively taking advantage of WAHDAH’s currently underutilised resources and existing network in the region.

An example of the cars in WAHDAH’s fleet / Image Credit: WAHDAH

They’ve also rolled out a few other strategies to keep business afloat, which include:

  • Wajual.my, a digital store that’s integrated to their delivery and runner platform called WaHero for their partners to sell and market products and services,
  • WaCash, their own e-wallet that allows customers flexibility in cancelling or rescheduling trips,
  • Unlimited driving vouchers that come with attractive discounts and better reward points.

The voucher allows customers to acquire the service now but use it later based on their intended travelling date with less hassle as a majority of the booking process will already be taken care of.

As for GoCar, they’re focusing on their initiatives mentioned earlier, GoCar for Delivery and their collaboration with Shell.

Predictions For The Rebound

Shahril believes that it won’t be easy for KLezcar to get back to earning 100% revenue in a short time after the MCO has been lifted, but that they will be doing their best.

“Since day one, we have been focusing on nurturing our database of customers which is now reaching almost 200,000. With this database of customers, we believe that it will help to expedite the process,” he shared.

Alan sees this as a moment of understanding for many about the advantages of car-sharing, particularly about how it’s low commitment, convenient, on-demand, and can be utilised not just for transportation but for logistics as well.

“Transportation is still key whether pre-lockdown, lockdown, and post-lockdown—the only thing that fluctuates is probably the functionality of the car.”

Because of that, he believes they will be able to rebound easily. “We are part of the transportation and logistics ecosystem. Economy needs to grow and with it, transportation and logistics are part of the key support system.”

And if user behaviours change, Alan said that they’ll simply have to tweak some of their messages.

Raden shared that the travel and automotive segments play a big role in the overall economy and will eventually return to normal as well, but that it won’t be an easy recovery due to how bad the travel tech and MaaS (mobility as a service) community has been badly affected by the pandemic and MCO.

Bottom Line: There were actually more uses to car-sharing than I had initially thought, and pivoting into helping with deliveries seems logical to do, especially since they don’t really need to change anything about their existing infrastructure to do so. Helping with charity movements are also quite a nice touch, I’d say.

  • You can read more about what we’ve written on the MCO here.

Featured Image Credit: GoCar / KLezcar / WAHDAH

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