A Q&A with iCarsclub co-founder and director Jamie Wang. The Singapore-based company was founded in 2012 and just raised $482K in Seed funding in early March from Red Dot Ventures, a VC affiliated with the Singapore government’s National Research Foundation.
SUB: Please describe iCarsclub and your value proposition.
Wang: iCarsclub is solving a problem in the world called car overpopulation. There are currently one billion cars in the world and it is estimated to increase to two billion in 20 years’ time. Rising car population would translate to road congestion and an increase in greenhouse gas emission. Furthermore, cars are only used eight percent of the time. That leaves 92 percent of car time wasted. In Singapore, there is over $4 billion worth of car time wasted every year. iCarsclub aims to utilize the wasted car resources in the society to provide a better mobility solution for commuters.
SUB: Who are your target markets and users?
Wang: iCarsclub is an online marketplace that satisfies the needs of both car owners and car drivers. Any car owner with free car time can list their car online with us and the car drivers who wish to drive a car will be able to rent a car online. This creates a win-win situation for both car owners and car drivers. Car owners can now earn an additional set of income from their idle car time up to SGD [Singapore dollars] $12,000 per year—approximately $10,000 USD per year. Meanwhile, car drivers will be able to rent a car at up to 40 percent lower than conventional car rental rates and have access to the car within a 500-meter walking distance.
SUB: Who do you consider to be your competition?
Wang: Currently there are no similar companies that compete against iCarsclub on the peer-to-peer car sharing platform. However, there is existing secondary competition in the market, mainly from car rental companies such as Hertz, WizzCar and Carclub.
SUB: What differentiates iCarsclub from the competition?
Wang: iCarsclub’s value proposition for the iCarOwner, car owners who list their car for rent, is safety and the ability to earn an extra set of income. iCarBox, a technology developed by iCarsclub, is installed in the rented vehicle as part of the registration process. The iCarBox has multiple features that include keyless vehicle entry, GPS tracking, speed recording and a GEO fencing system that ensures the car owner has peace-of-mind when listing their car out for rental. Furthermore, with each rental, all renters are required to purchase insurance that protects the interest of the car driver, car owner and the car itself. Additionally, the iCarOwner will be able to earn an extra set of income using the rates that they set themselves online.
The value proposition for the iCarDriver—drivers who wish to rent a car—would be convenience and value. Instead of filling out a long list of paperwork and travelling to a faraway depot for the collection of a rental car as per traditional car rental firms, car sharing enables drivers to have access to cars within a 500 meters radius through our online platform. The keyless entry system employed by iCarsclub eliminates the need for renters and owners to meet up for key exchange. With online reservation, drivers do not need to fill out long paperwork and they are able to rent any car they wish at the last minute—unlike traditional car rental that requires one-to-three days advance booking. Furthermore, as we are making use of under-utilized car time, the rates are up to 40 percent cheaper as compared to traditional car rental firms. iCarDrivers enjoy more flexible car rental services, as short as one hour and as long as weeks at a time. Additionally, iCarDrivers have a wide range of car models to use for different occasions. They can rent an SUV for a weekend outing, a van to move house, or a cute convertible car for a date.
SUB: When was the company founded and what were the first steps you took in establishing it?
Wang: iCarsclub was founded in May 2012 and launched on December 12, 2012. Since then, iCarsclub has garnered a large volume of media attention. Currently, we have more than 3,000 members and 400 cars listed on our website.
SUB: What was the inspiration behind the idea for iCarsclub? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Wang: iCarsclub’s initial idea was working around the concept of fully utilizing the transport resource to create a more balanced supply and demand. The original idea was to create a taxi booking system that unifies all the taxi firms in Singapore. This creates an opportunity to balance the supply and demand of taxis at different locations. Furthermore, there is a higher chance of smaller taxi firms getting hired, as they currently do not have any booking system in place. However, after further exploration, we found out that private cars have a larger potential as cars are only used eight percent of the time and there is a lot of under-utilized car time.
SUB: How did you come up with the name? What is the story behind it?
Wang: The name iCarsclub has the letter ‘I’ which sounds similar to the Chinese character ‘爱’ which holds the meaning of love. We aim to induce the concept of car loving in the minds of our target market.
SUB: What have the most significant obstacles been so far to building the company?
Wang: The greatest challenge iCarsclub faces is the existing law in Singapore that restricts peer-to-peer rentals to weekends and public holidays. However, the matter is currently under review for the Land Transport Master Plan 2013 and Minister Lui Tuck Yew had noted in previous interviews that car sharing is a vital component in the land transport jigsaw.
As car sharing is a relatively new concept in Asia, the consumer mindset is not yet mature to embrace this idea. However, from a recent iCarsclub survey, out of 92 drivers, 19 percent said that they are willing to be a part of a peer-to-peer car sharing scheme. Even with a conservative estimate of five percent, the potential of car sharing is still vast for iCarsclub.
SUB: You just raised $482K in Seed funding. What are your plans for the funds?
Wang: iCarsclub has plans to use the funds raised for expansion of the local operations in terms of increasing our manpower, product development, and also increasing brand awareness and brand establishment to achieve our goal of getting 1,000 cars by June, 2013. Also, part of the Seed funding will be used in the launch of iCarsclub’s operations in Beijing and Shanghai.
SUB: Why was this a particularly good time to raise outside funding?
Wang: We feel that our product is ready for the market and we want to scale up the marketing efforts for our product to improve service adoption. Furthermore, we believe that we are a team with strong execution power. On the business model, peer-to-peer car sharing has huge potential for ROI. As the first and only peer-to-peer car sharing online marketplace in Asia, iCarsclub has been validating the business as a profitable and scalable one. We are also at a transition stage and looking for more funding to expand to cities in China and other parts of Asia.
SUB: How does the company generate revenue or plan to generate revenue?
Wang: iCarsclub is a commission-based company that charges a 20 percent commission on each car rented out. Thus, based on the rental rates and hours of the cars listed on our website, iCarsclub will generate revenue from each rental.
SUB: What are your goals for iCarsclub over the next year or so?
Wang: iCarsclub has a short-term goal to achieve 1,000 car owners and 5,000 car drivers in Singapore by the end of June, 2013. By end of 2013, iCarsclub plans to launch the service in Beijing and Shanghai, and reach 1,000 cars in each city. From 2014 onwards, iCarsclub will expand to other cities in China and other Asian cities. In five years’ time, iCarsclub aims to build an online marketplace for peer-to-peer car sharing with over one million cars and five million renters across the whole of Asia.
iCarsclub – www.icarsclub.com