Malaysia is selected as the 1st country for SOCAR’s international expansion due to the transportation regulatory environment
by S BIRRUNTHA/ pic by MUHD AMIN NAHARUL
TECHNOLOGY is redefining the way we live. For the automotive sector and transport services, it has brought about e-hailing rides, self-driving vehicles and car-sharing services.
SOCAR Malaysia’s CEO Leon Foong (picture) feels technology will see people slowly move away from the dependency on personal car ownership to a car-sharing culture.
“I see a future where owning a personal car is no longer a necessity,” he said, adding that car sharing has actually existed for a long time and one of the early pioneers was started in the US with Zipcar.
The idea behind car sharing is very simple Foong said — which is how you break down a car rental model using technology — to allow people to rent a car for the hours they need it.
“In Malaysia, fortunately because of the popularity of ride sharing and e-hailing, we are able to launch an application-based car-sharing platform,” he told The Malaysian Reserve in an exclusive interview recently.
Foong added that SOCAR Malaysia is currently the leading car-sharing player in Peninsular Malaysia, available at 1,000 zones and locations to pick up and return a rented car.
SOCAR Malaysia was launched in January 2018 and is a joint venture between SK Holdings and SOCAR South Korea.
Its car-sharing network allows a user to make a reservation for a car with a smartphone; all less than five minutes.
“We wanted to explore a scenario where all you need for driving a car is your mobile phone. No keys, no wallet. You simply book a car on our app and then unlock the car and start driving,” Foong said.
“What this means logistically is that people do not have to worry about forgetting where they have kept the key or having to return a car to the next user without a key,” he added.
All SOCAR Malaysia rentals are push-start enabled and use a combination of wireless technology such as 3G, 4G and Bluetooth connection to unlock and start the car.
Speaking of its approach to safety, Foong said the company works closely with the police and the authorities to prevent any syndicates or fraudulent incidents related to technology.
“We adopt a 360° approach, where we do take steps before, during and after reservation,” he said.
Before the reservation, the company will run an extensive ‘know your customer’ check to ensure the driver’s licence is actually legitimate and the user is fit to drive a vehicle.
SOCAR Malaysia has multiple ways of tracking the asset beyond just one GPS, and constantly knows where its assets are and how they are being used.
“We ensure our backend operations are going smoothly, so that every single behaviour is reported and tracked,” he said.
Foong, who was the former GM of Uber Malaysia, stated Malaysia was selected as the first country for a SOCAR’s international expansion due to the transportation regulatory environment.
“There are clear guidelines in terms of how you apply for a car rental licence and getting permit for your vehicles. The sufficient insurance protection for all commercial cars ensures we can roll out a car-sharing service while making sure the safety of our passengers,” he said.
SOCAR Malaysia started operation here with 30 cars and now they have grown to 1,800 cars of various makes on offer for rental for a few hours to a month.
“Most people only use their car for a short time of their day, which means 90% of the time, the car is just sitting idle and generating extra cost.
“So, why not make use of the idle hours, by allowing more people to use the same car and make it more affordable? The car-sharing trend is relatively new in Malaysia. When we first started, people often were confused between e-hailing and car sharing.
“But now, I think over the past six to nine months, we are really seeing the adoption rate increase exponentially, because people have started to understand the use cases,” he said.
SOCAR Malaysia has 28 different car models on offer and has almost half a million membership base. Foong said all the cars are rented at least once a day currently.
As for its target market, Foong said its service is demanded by working adults but the company is seeing more and more people above the age of 40 using the service as well.
SOCAR services are a perfect option for trips further than 30km as the e-hailing fares are getting higher and the waiting time is becoming longer, Foong said.
“One thing we are going to stick to is that helping our customers in terms of choices and affordability. Even for cars such as BMW, people who have never driven such a high-end car will have the opportunity to have it at an affordable rate,” he said.
Typically, SOCAR Malaysia charges start as low as RM8 and it can go up to RM50 per hour depending on the car model and location.
People get to rent a car up to 30 days and they can pay the charges using debit card, credit card or even by using the e-wallet option the company provides.
SOCAR Malaysia offers various types of service and some of their popular services are the airport and door-to-door services.
“For the airport service, people can drive the rented car and leave it at any valid parking lot in the airport, whereas for our door-to-door service, they can actually get the car delivered to their doorstep,” Foong explained.
“Our vision is still pretty much the same — we want to give Malaysians the convenience of using a vehicle and the flexibility of being able to pay for car only when they needed.
“Technology is helping us on a few fronts, that are reducing downtime, tracking the condition of vehicles and tracking the safety of the passengers, vehicles and also the location,” Foong added.
SOCAR originated in South Korea and the company has raised US$18 million (RM75.06 million) in a round of funding in 2015, which was one of the highest funding deals for a South Korean start-up to date.
SOCAR is now actively looking to expand the service to other regions such as Indonesia, Thailand and Singapore via Socar Malaysia, Foong said.