As a small country, Singapore’s need to control car ownership has always been a no-brainer.
But for residents, access to a car is sometimes crucial and unavoidable. With less than half of households having a car, that access is naturally restricted.
Hence the Republic has tried various ways to allow more people to have access to a car, without actually increasing the vehicle population. But most of these attempts were half-hearted, at best.
In 1991, the government allowed car rental companies to include privately-owned cars in their rental fleet during special occasions to cope with high demand.
And in 1996, it started the Private Car Rental Scheme, which allowed car owners to rent out their vehicles directly to hirers. But this was restricted to weekends and public holidays.
Neither was very successful, given the restricted periods when such rentals could be carried out.
It would be more than 20 years later that car owners could freely rent out their rides – with no restrictions.
This little-known change of rule happened in 2017, when the Land Transport Authority dropped its requirement for private-hire vehicles to be owned only by companies.
With the change, individual motorists could simply convert their car to a rental car (and vice-versa) by paying a nominal fee.
This change is surely welcome by the Accounting and Corporate Regulatory Authority because it meant the authority no longer has to deal with tens of thousands of inactive companies previously set up by motorists who wanted to rent out their vehicles or become private-hire drivers.
But it does bring to question why there was a need for the Private Car Rental Scheme in the first place.
The scheme was meant to allow individual car owners to lease out their vehicles – but only on weekends and public holidays. Those who flout these guidelines are taken to task.
Are the concerns the LTA had back then no longer valid today?
Perhaps the landscape was fundamentally and profoundly altered when ride-hailing apps first appeared here in 2013, led by Uber and Grab.
These companies were viewed as technology players, and were thus unregulated by the LTA.
In reality, there were very much transport players – just players with tech. Fuelled by an exuberant investor community here and abroad, the duo penetrated the market instantly and aggressively.
With almost everybody owning a mobile phone here, the proposition of hailing a ride (a subsidised ride) without leaving one’s seat soon became the de facto way of point-to-point transportation.
It is estimated that this method now accounts for two-thirds of all point-to-point commutes.
In June 2020, private car owners can become mini rental car players without fear of red tape, fees and such.
These players, joined by others such as Gojek and Tada, plied their trade freely, unencumbered by regulations which the taxi industry had to abide by.
Things will change in June 2020, when a new licensing regime kicks in. But even then, the regulations governing ride-hailing firms remain far less stringent that those governing taxi operators.
Huge discrepancies in driver and vehicle profiles remain. But on the flipside, consumers are unlikely to be any worse off. They will continue to be spoilt for choice where point-to-point transport services are concerned.
Until the day when these app-based firms lose their lustre (or investors lose their patience), consumers will continue to enjoy fares which are subsidised in one way or another.
But why should the realm of the shared economy (if the term is even correct) be the sole preserve of app companies?
In 2016, I wrote a commentary on why we should not leave change to Uber and gang. That if Singapore truly wanted to nurture a shared economy, it should open up the entire market to all motorists.
Indeed, that has come to pass. In 2017, the LTA dropped the requirement for individuals to register companies to start private-hire business.
At the same time, it allowed car owners to freely change their vehicle registration from P (private, passenger) to R (rental), for a one-time fee of $100.
This meant anyone who wishes to make some money from their car no longer had to rely on the app companies.
The new licensing regime, which comes into effect next June, exempts operators with fewer than 800 cars. That means each one of us can become a mini car rental player if we feel like it, without fear of red tape, fees and such.
According to the LTA, more than 4000 cars have already made the switch. In 2017, there were 2097 P-to-R conversions.
Last year (18), there were 1690. And in the first six months of this year, there were 619.
It is a small percentage of the 600,000-strong privately-owned passenger car population, but the figure could be a function of low awareness.
A check by Torque revealed that even traditional car rental companies were not aware of this two-year-old rule change.
When more become aware of this, it is quite likely that more will jump on the bandwagon – just as tens of thousands signed up to become private-hire drivers after the arrival of app-based ride-hailing firms.
If and when that happens, will the automotive sector be plugged into the shared economy? Will non-car owners have easier access to a car?
It is quite likely, even if plenty of potential teething problems lie ahead.
The stage, however, is set. How things pan out depends very much on the players (the motoring public) and the directors (the regulators).
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