LCR sold off 500-1000 cars in the last month

Uber owned Lion City Rental has begun selling off their vehicles in the past 2 months.

Lianhe Zaobao reported that more than 500 to 1000 private-hire vehicles owned by Lion City Rental were sold according to industry sources. The cars sold are registered between 1-2 years old and include popular car models like the Toyota Corolla Altis and Toyota Prius Hybrid.

Trimming the fat

There are an estimated 4000 private-hire vehicles that are left unused in the industry. Lion City Rental alone contributes to a large number of the unused fleet. Being the biggest private-hire rental company in Singapore, LCR has vehicles that are not leased out all over Singapore. It is projected that they have more than 1000 cars in the facility at Sungei Kadut, where they leased the space to keep the cars. Other carpark facilities that have a large fleet of LCR vehicles include Parklane @ Selegie, Bigbox at Jurong East and open car park at Holland Drive

 

Drop in Private-Hire Drivers

Since the introduction of the PDVL framework on 1 July 2017, there has been a drop in the number of Private-Hire Drivers. Many drivers who were driving previously were removed from the system after they failed to get their Approval-To-Drive from LTA to continue driving. All drivers are required to obtain an in-approval from LTA before they were allowed to provide private-hire service.

From 1 July 2017, new drivers are required to get a Private car Driver Vocational Licence before they are allowed to start providing the service. Permanent Residents and work pass holders are also required to be employed by a chauffeured limousine service company.

Under the new regulations, all private-hire vehicles are also required to affix a tamper-proof private-hire decal on the front and rear windscreen of their car permanently. Any tampering or illegal removable decal will be heavily punished and result in the driver’s vocational licence being revoked.

The heightened barrier to entry to become a private-hire driver resulted in a reduced pool of drivers and thus many empty cars lay unused in car parks.

 

Many car rental companies scaling back in fleet expansion

Many small to medium sized car rental company that provides rental car for private-hire usage are scaling back in buying more cars as the market hits a saturation point. A few rental companies we spoke to said that demand is much lower than before and many drivers returned the vehicle since 1 July 2017, when the regulation kicked in. Some of their vehicles have been sitting in the showroom empty since then. Some have lowered prices and offered more benefits to attract drivers to rent from them but not seen any significant improvement. Mr. Lim, who owns a fleet of 15 vehicles and operating for the past 3 years, said that he will not be buying any more cars for uber/grab rental as he now has half his fleet sitting in his showroom for the past 2 weeks. “The good old days of high returns and turnover on these cars are over”