The dire economic situation has claimed its first casualty in the car rental industry in Singapore. Smove, a local car-sharing company that offers cars to private-hire drivers and end-users has gone bust.
It came shortly after global car-rental giant Hertz also filed for bankruptcy.
Smove started back in 2012-2013 with only a few electric cars and covered only a small area. It is different from a traditional car company as it allowed users to pick-up and return the car in any of their 90 designated locations.
It also allowed users to book for as short as a few hours and users will only be charged for the hours that they booked. Many private-hire drivers who wanted to drive for only short-hours chose to drive with Smove as they did not have to pay the full day rental cost.
Smove eventually grew to 450 cars and 60,000 customer base.
The Straits Times reported that Smove is under “provisional liquidation” since May 21, making it the first major player in the vehicle rental market to fold up in recent years.
The news came as a surprise as Smove CEO Lokenvitz recently mentioned expansion plans back in February and denied news reports of the firm facing financial difficulty.
He added that the firm is working on increasing its fleet size instead.
Car Rental Population Strink for a second consecutive month
The Straits Times reported on 2 June 2020 that after many years of increased due to private-hire demands, the car rental population growth has halted. In April 2020, the car rental population shrank by 1.4% to 76,312.
Many private-hire drivers are unable to make ends meet due to the significant decrease in ridership overall. Many have since returned their cars to the rental companies.
The Straits Times estimate that 20,000 cars are sitting unhired now. Many cars are sitting in carparks across the island, including Turf City, Textile Centre, Carros Centre and Sports Hub.