Economic Viability Of Electric Car Sharing In Singapore

After years of waiting, the highly anticipated electric car sharing was launched in December 2017. With an initial fleet of 80 shared electric vehicles available at over 30 locations across the island, the new scheme allows users the convenience of a car without the various hassles and costs of owning one. This is part of the government’s initiative to promote environmentally friendly vehicles and to complement the public transport in Singapore.

Benefits Of Shared Electric Car

The shared electric car scheme offers a myriad of benefits to cater to users who cannot afford their own car. Do a comparison analysis with the assistance of your economics tutor or discuss it with him in economics tuition.

  • Easy to use
  • No cost of petrol
  • No insurance and road tax
  • Maintenance free

Brainstorm with your economics tutor in your economics tuition class what other costs there are in addition to the above.

Users can enjoy these benefits at affordable prices. There are two payment schemes to choose from: $0.33 per minute with a monthly fee of $15; and $0.50 per minute without the monthly fee. This works out to be less than $20 for a one-hour rent of the car for the former and $30 for the latter. Even better, users are allowed to pick up and return the vehicle at any of the over 30 self-service locations across the island.

It seems to be a great option for users who intend to rent a car for a short period of time. For those who need to drive around for a few hours, it may not be a wise choice.

As another alternative to taking public transport or owning a car yourself, how is shared electric car as compared to other options such as car rental, Grab and Uber?

The Cost

Users need not worry about insurance, road tax and maintenance for all four options. Car rental is obviously a better option if you need to hire a car for use for an extended period of time. The daily typical rental of a Toyota Vios is about $50 a day. With this amount, you can only hire a shared electric car for less than 2 hours. Of course, we need to take into consideration petrol consumption too as users are required to top up petrol to full tank upon return of the rented car. Discuss with your economics tutor in your economics tuition class the effect of inclusion of petrol cost in the equation. What will be a better choice between shared electric car and rented car if you need to use the vehicle for 2 hours and top up petrol worth of $30.

Grab and Uber involve no petrol cost. However, the rate of a Grab and Uber ride is very much dependent on the demand and supply at a particular location and point in time. In contrast, the rate of a shared electric car is flat. Therefore, it makes more sense for one to pick a shared electric vehicle during peak hours and at hot locations given that it is convenient for them to pick up and return the vehicle.

It seems the shared electric car does have its unique competitive edge and is able to fill the gap of existing options available. However, like a coin has two sides, the shared electric vehicle also has its disadvantages. Weigh the costs and benefits of a shared electric car with guidance from your economics tutor or do a case study in economics tuition to form your own opinion.

Limited Charging Locations

With only over 30 charging locations presently, you may not be able to find one near to your starting point and destination. However, as time goes by, the situation will improve as it is the plan – according to an agreement signed among the operator, BlueSG and government bodies, the Land Transport Authority and the Economic Development Board – to have a total of 500 charging stations and 1,000 cars by 2020. With 80% of them being located in residential estates, there could be one in your own HDB multi-storey carpark.

The shared electric car operates with government subsidy. Discuss with your economics tutor or during economics tuition on the impact of government subsidy on demand and supply. With guidance from your economics tutor, draw the demand and supply curve.

Limitation On The Maximum Distance Run

A shared electric car has a maximum distance run of about 200 kilo metres. Users have to return the vehicle to a charging station once the battery level drops to below 30%.

In conclusion, the shared electric car has its appeal and limitations. With the concerted efforts by the government and the operator to bring the charging locations nearer to users, it has the potential to gain a greater market share in future.

Linda Geng

Click to Read Next Post

economics tuition, back to homepage

Economics Tuition Singapore @ Economics Cafe
Principal Economics Tutor: Mr. Edmund Quek