SG car rental firm surfs ride-hailing wave to FY 2022 profits

As ride-hailing grew in popularity across Southeast Asia, it soon spawned a number of adjacent businesses, like ghost kitchens and dark store-based grocery deliveries.

Another of such businesses is the private-hire vehicle (PHV) rental company. Not all aspiring ride-hailing drivers own cars – Singapore, in particular, has one of the region’s lowest car ownership rates – and players like Singapore-based Lumens rent out these cars to drivers as a third party.

“The origins of Lumens coincided with Uber’s market entry,” Lumens head of business Marcus Low tells Tech in Asia.

Photo credit: Lumens

As a business, PHV rentals may not be a behemoth in size like Grab or Gojek. But unlike those two, which only achieved their first positive EBITDA in recent months, Lumens has been profitable as early as 2021, according to financial statements reviewed by Tech in Asia.

For the 2022 financial year, Lumens registered S$48.3 million (US$35.7 million) in revenue with US$3.8 million in net profits, a 73% rise from the previous year.

“[Lumens’] primary growth engine remains the private-hire vehicle leasing stream underpinned by the pivot to a hybrid vehicle fleet,” Low says. This shift has helped address drivers’ pain points, including increasing fuel efficiency, and synergized with Singapore’s green initiatives.

Since then, the company appears poised to grow even further. By 2022, Lumens had expanded beyond its original business, with offerings such as short-term rentals, car concierge services, and even car sales and financing.

Without sharing more specifics, Low says Lumens’ topline and bottom line “doubled” year on year in 2023.

Right place, right time

Lumens’ rise is inseparable from Grab’s. The former’s headquarters are located in Singapore’s Midview City complex, which also served as Grab’s headquarters for the city-state in its early days.

Lumens was also founded in 2014, just as Singapore laid down the groundwork for regulating ride-hailing. That year, Lumens rented out about 60 cars to Grab (then known as GrabCar) and Uber – before the latter exited the region in a deal with the former – according to a 2015 interview with Today.

But as demand continued to balloon, Lumens grew to become a major PHV leasing firm in Singapore, and the company appears to have done so without outside funding. Early on, founders Ryan Tan and Kuanyu Tan bootstrapped the firm, and there have been no public reports of external funding since then. (Kuanyu Tan, however, left the company in 2018 to join used-car marketplace Carro.)

The company is continuing in its path of sustainable growth through asset-backed financing of its assets, Low says.

Of course, Lumens is not the only player in this race – Grab, for one, has been operating GrabRentals since 2016. The super app claimed that its PHV rental business is Singapore’s largest, having earned US$146 million in rental income from motor vehicles in FY 2023. In 2022, the number was US$126 million – about 3.6x higher than Lumens’ for that financial year.

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