Global Observer

Where wheels are a status symbol, could car sharing take off?

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HONG KONG -- Car sharing is a hard sell in Asian cities, but some businesses are trying to change consumers' minds.

HONG KONG -- Cars are not just for driving, far from it. But in Asia, the status statement attached to cars is so strongly held that it is holding back the development of car sharing, a transportation option that is widespread in the West.

In Asian metropolises with high population densities, it often costs more to own a car than in North America or Europe, and it can be a hassle, as drivers constantly worry about parking, high fees and taxes, high gas prices and bad traffic. It would seem like the ideal place for car sharing to take off, yet start-up firms and analysts say that it is precisely the cost and difficulty of owning a car that make car ownership so desirable -- and car sharing so unattractive.

“A lot of people can’t afford a car, so if somebody can buy a car, that means a great glory to their family or that kind of thing. So a car is more like a social status [symbol],” said Jamie Wang, a native of China who has a start-up car sharing company in Singapore called iCarsClub.

Car sharing services like the U.S.-based company Zipcar are widespread in North America and Europe. But in Asia, only a handful of places currently have such services.

Singapore and Japan each have at least three car sharing companies that follow the traditional business-to-consumer model like Zipcar, where the company acquires a fleet of cars that are then parked around the city, and members can borrow them for hours or days at a time. The concept has also found its way to Seoul and Hangzhou, China.

ICarsClub uses the peer-to-peer model, believed to be the first of its kind in Asia, in which individual car owners put their vehicles up for hourly or daily rental and can be found through an app.

Wang says the mutual trust within Asian communities is not as high as in Western countries, with the worry that customers would not take good care of the cars. And he says the high education level in Singapore and Japan might explain why those places have pioneered car sharing in Asia, whereas in less progressive countries, there are concerns that “people might just dirty your cars or maybe change your car parts. So there is a lot of risk.”

Hong Kong also has a peer-to-peer service, a start-up called CarShare.HK, and its founder, Christopher Yeung, says trust is an issue in all cities around the world when it comes to peer-to-peer car sharing, but there are way for companies providing the sharing platform to increase the trust level among users. His company does a check of members’ driving records and verifies their identities, but it also focuses on cars that are located in large housing blocks. “If the renter is your neighbor, you somehow have a connection with them because they have similar demographics,” he said.

Although the Hong Kong government tries to control car ownership and road congestion by imposing huge taxes on cars -- upward of 115 percent tax for new cars, depending on the car price -- the number of private cars continues to go up, increasing by more than 4 percent per year for the past three years. In Singapore, the new-car tax reaches 180 percent, on top of a permit that costs about US$15,000.

Peer-to-peer car-sharing businesses say their services can reduce the number of cars on the road in the long run, while helping car owners offset some of these high costs. Wang says he is targeting car owners who might be having financial troubles to lend out their cars.

“They might have bought a car but seldom use it, and they still need to pay all the taxes, insurance and everything. It might be a financial burden for them. So when they face these kinds of problem, we are providing an alternative or a choice for them, helping them to offset the costs,” Wang said. He says he is also trying to increase awareness of car sharing by writing articles on the subject and doing interviews with the local media.

Although car sharing seems to make sense for Asia, some experts are skeptical that the concept can succeed on a large scale for the reason of status. Michael Dunne, a Hong Kong-based car consultant, told PRI’s The World, a radio news service, that China would never embrace car sharing because it would be contrary to the need for status. “Forget about it. No way. It’s not going to happen. Unthinkable,” Dunne said. “It’s an image factor, big image factor.”

But in a place like Hong Kong, there is hope still that the government could help advance the cause of car sharing, says Timothy Fong, a consultant with Carbon Care Asia, which advises businesses on cutting carbon emissions. “The government could provide some funding, but also certain initiatives to help promote car sharing in Hong Kong,” he said.

Photo: Flickr/Lightsurgery

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Vanessa Ko

Correspondent (Hong Kong)

Vanessa Ko has written for TIME, South China Morning Post and Phnom Penh Post. She holds degrees from Northwestern University and the University of Hong Kong. She is based in Hong Kong, China. Follow her on Twitter. Disclosure