SOCAR to replicate the success of e-hailing

The South Korean start-up aims to reduce car ownership among Malaysians with its car-rental service as an added advantage for users


When MyTeksi was first launched in 2012, no one could have guessed that it would one day turn into an e-hailing giant that changes the regional public transportation landscape.

From a modest homegrown app, MyTeksi — born out of its founders’ exasperation to get a cab in the city — was rebranded as Grab in 2016 and became a billion dollar company operating in eight South-East Asian countries.

The success of Grab is profound not only because of its astonishing growth in less than 10 years, but also due to the fact that it has managed to change the public transportation sector.

Ironically, in Malaysia, it became a contentious issue where taxi drivers started to rally against this app, which was initially created to improve its service.

That is the same challenge to be faced by SOCAR, a mobile app-based car-sharing programme that aims to reduce car ownership among Malaysians with its car-rental service.

The South Korean start-up, however, is upbeat that its service will become a trend in Malaysia in the future, taking into account that there has been a shift in mentality among locals on public transportation and car ownership.

According to SOCAR CEO Leon Foong, while e-hailing is a big success here, car-sharing services have an added advantage for users.

“E-hailing is meant to get people from one point to another, usually with just one destination. Car sharing, on the other hand, allows our users to book a car for the whole day if they wish, and do what they like at affordable prices.

“SOCAR just offers a different set of opportunities in the transportation industry today,” Foong said in an exclusive interview with The Malaysian Reserve (TMR).

At the moment, SOCAR as a car-sharing platform has not been affected by the regulations set for the e-hailing industry.

This, according to Foong, presents an opportunity for the company.

“If we look globally, car sharing is naturally a partner to e-hailing. If an e-hailing driver needs to have his car inspected or of a certain age, we are happy to offer them our vehicles. All our cars are inspected by Puspakom (Computerised Vehicle Inspection Centre), insured and ready to be used.”

“As long as it sits within the policy, it’s possible. This will create more opportunities for us to work with other players in the industry,” he said.

Foong told TMR the company has seen an exponential growth since its launch in Malaysia earlier in January 2018.

“When we launched this year, we started up with 240 vehicles. Today, we currently own and operate 850 vehicles across Malaysia, in 450 different locations both in Kuala Lumpur (KL) and Johor Baru,” Foong said.

For KL alone, the company has strategically placed its vehicles for rent in 425 locations easily accessible for users.

Foong said for Malaysia, SOCAR is looking into expanding to the northern region and plans to have its service in 1,500 locations with 3,000 vehicles by the end of 2019.

Vehicles from the platform can be booked or rented for as long as a month or only half an hour.

All the booking processes up to the return of the vehicle are done via its app.

“I’m very impressed with how people have embraced the trend. So far, our core advantage is knowing how to operate and distribute the vehicles.

“If anyone can tap into these with us, we are constantly looking for collaborations and partnerships,” Foong said.

Foong revealed for the first month, the longest journey drive was calculated at 1,600km across Peninsular Malaysia with a green MINI Cooper.

“Another interesting thing we learnt was, one of our top users has spent more than RM15,000 on the exact same car, picked up at the same location over the weekend, across the span of six months,” he added.

Foong is also confident that the company will change the way Malaysians think about having a car.

He said looking at rising overall interest rates and the relative ratio of savings to loans, it is possible for people to prefer renting vehicles instead of owning them.

“The financing market for loans will tighten up and it will become harder to get loans, this created a push factor for us. The pull factor is that we are very affordable and the locations are the best for our users,” he said.

Currently, most users opt to use the platform for a round trip booking, where the user picks up a vehicle at its designated location and returns it back at the same spot.

However, SOCAR wants to provide for users who need vehicles for a one-way trip, such as going to the airport to catch a flight.

“Users can book a vehicle, drive to the airport and leave the vehicle at a legitimated parking lot together with the parking ticket and not have to worry about anything,” Foong said.

SOCAR currently offers more than 12 different car models, ranging from the Axia, Myvi, Honda HRV, Honda BRV to MINI Coopers and BMW 3-Series sedans.

Foong said a substantial amount of investment was pumped into starting up the company here in Malaysia, mainly from its main shareholder, SK Holdings Co Ltd, which owns 60% of SOCAR Malaysia.

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