Millennials, Gen Z drive car-sharing boom

Car-sharing and car-leasing services in Singapore are reporting a boom in demand, fuelled by millennial and Gen Z users who are more open to using a car for hours or days instead of owning one.

Mr Toh Ting Feng, chief executive and co-founder of GetGo Technologies, expects demand for its car-sharing services "to grow more than 50 per cent from 2022 to 2023".

This growth is driven only partly by higher certificate of entitlement (COE) prices, he says.

"Other factors driving the growth of our service include a shift in mindset away from ownership among the younger generations, a growing interest in sustainability, and the continued enhancement of our platform and service," he adds.

The average age of GetGo users is 35, he says. Rates for its Standard category of vehicles range between $3 and $11 an hour, depending on whether the cars are used off-peak, during peak periods or outside those times. More than 250 vehicles in GetGo's fleet are electric vehicles.

As of 2023, millennials are aged between 27 and 42, whereas Gen Zs are aged up to 26.

Mr Marcus Low, head of business at mobility service provider Lylo, says demand for its short-term car rental service, called LyloDrive, has increased an average of 28 per cent month on month over the past four months.

Its fleet is 99 per cent hybrid or electric, which reflects a keen interest in sustainability from its Gen Z and millennial customers.

The younger people driving this demand for car-leasing - including well-paid professionals like doctors and lawyers, and even pet owners taking their pets to the vet - "see little value in owning a vehicle", he says.

"A lot of our repeat customers come to us based on need. They may lease cars to run errands or drive to Johor Bahru for a shopping trip."

LyloDrive's median daily rental rates of its most popular vehicles range between $90 and $150.

Mr Evert Ong, head of Kinto One leasing, Kinto Singapore, says its long-term car-leasing service, which leases cars for months or years, has seen up to 20 per cent growth month on month since 2022. Prices start at about $1,600 a month.

He notes that his customers use different vehicles for different stages in life. A young man may hire a sedan for errands and, in a few years, lease a sport utility vehicle when he becomes a parent.

Car-sharing platform Tribecar has seen a 15 per cent spike in sign-ups in the last six months, says co-founder Adrian Lee. It offers a variety of vehicles, including motorcycles, luxury cars, vans and lorries. Its rental rate starts at about 50 cents an hour.

In particular, it is seeing growing clientele in the form of more mothers using its subscription service to drive their children to school during the week, says Mr Lee.

His data shows that Gen Z digital natives are driving the latest demand in car-leasing.

"Although the majority of our users have been between 26 and 35 years old, we have observed a noteworthy uptick in users aged 18 to 26.

"It has become common among the young generation. Just by installing another app, you suddenly have access to a set of wheels."

Assistant professor Ben Choi, from the division of information technology and operations management at Nanyang Technological University (NTU), notes that car-leasing services seem to be a "bridging mechanism" between owning a car and having one on demand, for example through car-sharing, though he has encountered complaints about the availability of shared vehicles.

Mr Niko Gunadi, 41, is a new convert to car-sharing. To get around, former car owner Niko Gunadi, a technical project manager in the telco industry, cycles, takes the MRT and uses car-sharing services. 

The technical project manager in the telco industry cycles to the MRT station to take the train to and from work. He gave up his Chevrolet several years ago as it was "sitting idle in the carpark" most of the day. High costs were a big deterrent too.

He sometimes books a GetGo car when he needs to run errands at various far-flung locations that would be challenging to use a private-hire vehicle for.

The divorcee likes to get a shared car to spend more time with his nine-year-old son on the weekends, when father and son may play badminton and hang out, instead of grappling with public transport.

Mr Gunadi says: "My time with my child is limited and I want to optimise it."