Over at the Goody Feed office, there is a number of private-hire cars at the rooftop car park. We know because we’ve often gone there to film for our videos.
Here, take a look.
So it’s no surprise that just two days ago, Zaobao reported that Uber’s car rental firm, Lion City Rental, is selling off their 1- to 2-year-old cars.
4,000 cars not rented
According to the report, about 4,000 cars are being left idling, rotting in car parks due to a surplus of supply.
Here’s the thing: unlike cars in other countries, cars in Singapore is never an asset. They depreciate faster than anyone can imagine, and with them being not rented, the cost of leaving them in a car park isn’t cheap as well.
Which is why, unlike in other countries whereby people abandon their cars like how they abandon their clothes, you’ll never see such incident in Singapore. Every car that isn’t on the road is bleeding money.
Uber started selling their cars about two months ago
Holding on to these fast-depreciating assets is like holding on to an employee who just comes to the office to drink coffee: more money would be lost (not that they’re making money, anyways).
About one to two months ago, Uber has sold about 500 to 1,000 of these cars, primarily their Toyota Prius and Altis.
And these cars are merely one or two years old.
Anyone who has bought a car in Singapore would know that it’s a large loss if you sell a car after such a short period.
A car rental firm boss who didn’t rent out to Uber / Grab drivers told me that he would not buy any of these cars simply because of maintenance issues: while these cars are technically one to two years old, their mileage is crazily high, almost that of a ten-year-old car.
Why the sudden U-turn?
Uber wouldn’t have made the mistake of oversupply, won’t they?
Apparently, the problem was caused by the new private-hire regulations that kicked in on 1 July 2017. Industry sources alleged that upon 1 July 2017, some private-hire drivers called it quits, leading to a surplus that no one had expected.
What’s in it for us?
As commuters, we first experienced the pain when COEs remained high even when a number of cars were supposed to be de-registered—back then, we attributed it to Uber buying the cars.
This could mean two things: firstly, cars might finally be more affordable, and secondly, let’s just enjoy this competition because competition usually means we benefit.
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This article was first published on goodyfeed.com
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