iCarsclub aims to popularize carsharing in Asia by making it more convenient, less expensive

Asia might make a promising market for carsharing. Depending on where you live, cars are either too expensive or rendered useless by traffic congestion. These problems give carsharing intiatives an invitation to come in, which is why iCarsclub wants to be an early player in this space.

The Singapore startup has been working on their solution for months, and after delays with finalizing their motor insurance terms, it finally launched on 12 December.

Collaborative consumption for motor vehicles is not new in the world or even Asia.  This year, we’ve seen ridesharing apps enter the market, offering users the ability to split costs on a cab fare or find a carpooler to share a ride to work. Governments are particularly supportive of this concept due to its public benefits: Reducing air pollution and traffic congestion.

In Singapore, carsharing companies like CarClub and Whizzcar own a fleet of vehicles and offer membership plans that gives access to a variety of vehicular types. Customers can make a booking, head to anyone of the stations belonging to the companies, and begin driving.

While iCarsclub shares some similarities with these two companies, its business model is fundamentally different. It shares the DNA of modern web startups, aiming at scalability and growth. Think Airbnb, a peer-to-peer property rental site, but for cars.

We can start understanding iCarsclub by viewing it as a two-sided platform business. In other words, it is a marketplace that brings two groups of customers together who can mutually meet each other’s needs.

It enables car owners to make money by renting out their car when it’s not in use, and also allows commuters to zip around town in a vehicle without the hefty ownership costs. iCarsclub simply provides the platform and infrastructure to bring these people together to transact in a convenient fashion.

So, iCarsClub does not actually own a fleet of vehicles. It does not have to pay for maintenance either, since that is the responsibility of car owners. The only hardware it has to keep in tiptop shape are the keyless entry systems that customers can unlock with a mobile phone prior to getting into the car.

A car can be unlocked via iCarsclub's mobile site or an URL sent via SMS.

In theory, iCarsclub can lower usage costs since it saves on operating expenses. Indeed, Jamie Wang, founder and CEO of the company, claims that on some makes, its fees are 30%-50% lower than its competitors.

However, it isn’t easy to make a straightforward comparison, because the fee structures are radically different. Weighing a three-hour rental of a manual Suzuki Swift on a Monday morning of both services, I find the costs to be roughly similar. iCarsclub’s fees came up to SGD39, inclusive of prepaid fuel charges, while CarClub’s fees are either SGD26.60 or SGD35.90, depending on which membership plan you have.

While it might seem that CarClub is the winner here, the situation is complicated by the fact that the company charges a one-time fee of SGD100 and a monthly fee of SGD10.70. iCarsclub, on the other hand, is free to join. Its fee structure is much more simpler too, and that’s welcoming. It simply earns revenue by taking a 20% cut of every transaction.