The Business Idea
We have come to a time in Singapore where the cost of owning a car has rocketed sky­high. Just when people in Singapore are still dwelling on the exorbitant Certificate of Entitlement prices, moods were dampened further with the recent declaration concerning cars. With reference to the Singapore Budget 2013, the maximum loan tenures have been reduced to five years which will also mean that there is a possibility where banks might increase their car loan interest rates. In addition, loan for cars is to be capped at 60% Loan­to­Value and cars with more than $20,000 of vehicle’s purchase price is capped at 50%. That is to say, if a car cost $100,000, the car buyer will have to fork out at least $40,000 to $50,000 in cash(Singapore Government 2013). Hence, many citizens in Singapore has found it increasingly challenging to cope with the tough new curbs on car loans immediately on the following day of the introduction. On top of that, owners of luxury cars will also have to fork out more money to pay for the increase in tax rates introduced in the budget. Bundling the 2013 budget with ever increasing fuel prices and maintenance cost, it will be hard for Singapore to not be the most expensive country to own a car. Despite all these new measures, there will still be a strong need for people in Singapore who require a car in their life with reasons such as having an elderly in the house or travelling for work related purposes. For that reason, people will be looking for alternatives to own a car. The most well­known alternative is to rent a car. Car rental is a norm in Singapore, especially during the festive period as borrowers are able to borrow the car for a period of time. Singapore is also a great place to develop this platform as the general safety of the country is relatively high, with decreasing theft cases and also low accident rates. This allow car borrowers to enjoy the luxury of owning a car without having to pay for taxes, car maintenance and monthly installments. However, without the no holds barred way of renting a car, there are still downsides such as the period of rental and location of picking up the car. That is why we are coming up with a Peer­to­Peer car sharing which could be the solution for drivers who are unable to own a car.

Product/service description:
Our service Using our Peer­to­Peer car sharing platform, it caters to 2 groups of people: a person who is looking for a car to rent and a car owner who is looking to rent out his car. In addition, this service does not involve a middle man hence the benefits of using this service consists of a flexible renting period, a large array of cars to select from and being able to look for a car you fancy in the closest proximity. Every car registered with our platform will be installed with a box which is equipped with a GPS to allow tracking of the position of the car and if needed, will also be allowed to monitor the fuel used and speed driven. A mobile application will also be developed to ease the usability of the platform which helps users to have access to the system without their computers and wherever they are.

Service blueprint Benefits for car owners Car owners are able to share their vehicles when they are not using them within the registered users of the platform. Instead of leaving the car idle in the car park, car owners can make better use of their cars by renting their car out. Car owners will be able to generate income through the renting out of their cars which will be able to aid in paying the monthly installments and frequent maintenance of their cars. Benefits for individuals looking to rent a car Individuals who are looking to rent a car through the platform are able to save money on paying the full installment of a car and paying for car maintenance but still enjoy the luxury of driving a car whenever it is needed. These individuals are not only able to find a car they are satisfied with, but they are also able to look for a car that is near and which is most convenient to them. What we are doing here is that we want to connect all the spare and unused cars in Singapore and maximise their use to benefit car owners and individuals who are looking to rent a car. Benefits for the country and the environment In line with the recent reports and policies from the Singapore government, there are plans to reduce the number of vehicles on the road. Hence with our introduction of car sharing through rental of personal vehicles, we are not only able to provide a solution for traffic congestion, we are also able reduce the annual vehicle population growth in Singapore. On a global scale, decrease in vehicles will also mean that there will be a decrease in vehicle emissions and hence playing a part in lowering our carbon footprint for the environment.

Description of the entrepreneur/s and the venture team: Ev
Collectively as a team, we bring about different strengths and knowledge to contribute to the commercial viability of this Peer­to­Peer car sharing platform in Singapore. Not only do we bring about in depth knowledge regarding local consumers and the current situation of this developing niche industry, as individuals, we also contribute through our personal knowledge, expertise and experience.

Current industry Shaheen & Cohen (2012) through the help of Transport Sustainability Research Center has conducted a research and found that in the current industry of Car sharing, there is a 20% growth worldwide and a 40% growth in asia alone.

In 2006, Dr. Susan Shaheen developed a survey on the current carsharing demand, the survey examined how familiar the subject is with carsharing and future plans of acquiring a personal vehicle, also the daily transportation of the individual was examined. The results of the survey was that 26.4% of respondents reported that they where interest and likely to use carsharing, of which 40% of them was familiar with carsharing. In general,the findings where that the younger age categories (20 to 35), was more interested in carsharing.” Nevertheless, carsharing appears to have appeal across the sociodemographic groups in the study. (Shaheen & Martin 2010) In the latest acquirement AVIS Budget Group bought up Zipcar for $500 million, Zipcar was based in US, set up in 2000, currently it has over 760000 members and 11000 vehicles worldwide. From 2006 to 2010, there was rapid growth in the carsharing industry less Austria and Singapore (Shaheen and Cohen 2007). In Singapore, two carsharing terminated its operations of carsharing, CitySpeed and HondaDiracc. Which was mainly due to falling car prices and that previously the business had grew too big and they were unable to maintain its service quality. It was reported that HondaDiracc had made $109,146 after tax last year, versus $278,826 in 2006 and $125,911 in 2005. (Tan 2008) Currently in Singapore there are 2 main car sharing companies, Car Club is Singapore's largest car sharing company, with 150 cars and 54 stations. Which saw a 30% increase in business from 2011 to 2012. WhizzCar, the second largest car­sharing company in Singapore, operates 90 cars also so an increase in business by 20% in the same period. Currently there are 160500 members with 6155 vehicles in asia making that a ratio of 26.1 per car. (Shaheen & Cohen 2012)

Market potential for this industry
Figure : World Wide Carsharing Then and Now: Six Years of Growth (2006­2012) (Shaheen & Cohen 2012)

From the figure that Shaheen & Cohen(2012) has came up with, it can be see that in asia, Carsharing just completed a phase of growth from 2008­2010 after coming back from a period of decline in 2006­2008 we can relate it into singapore context, where we saw 2 companies closing

namely HondaDiracc and Cityspeed shortly after, now the market is stabilizing from 2010­2012

Figure : Motor Vehicle Population By Vehicle Type 2012 (Land Transport Authority, 2012)

The closing of both HondaDiracc and Cityspeed was due to a drop in pricing of cars in 2006 and the inability provide and maintain the quality service that they had provided with the increasing numbers of cars they had on hand. In this chart we can see that due to a drop in pricing of cars, the number of cars increased by almost 30 to 40 thousand each year from 2006 to 2009 compared to the rest of the years which ranged about 5 to 6 thousand. With the recent development of rising COE cost and government measures to reduce the number of cars on the road, there is much room for carsharing to grow in Singapore as compared to other dense populated areas in asia such as Japan. In singapore due to the prices of COE it regulates the number of cars on the road, seeing that it has a 10 year period we can look at the number of cars that will expire in the next few years from the figure below
Figure : Motor Vehicle Population By Vehicle Type 2012 (Land Transport Authority, 2012)

From the figure above we can see that in the next 3 years growth would remain constant if no new measures are taken by the government to reduce cars even further, and after 2 years the car sharing industry in singapore would enter a phase of growth of at least 2 to 5 years again as the current pool of car owners would have their cars scrapped increasing the pool of target customers. Most cars also sit idly 90% of time which is an untapped market for owners as an additional source of income, (Hampshire & Gaites, 2011)

PESTLE Competitors (Direct):

Currently the 2 main competitors in the field are : Carclub and Whizzcar. Both companies provide B2C (Business to consumer), this companies typically command a large fleet of cars and are heavily sponsored by car companies such as BMW/Toyota etc, hence compared to a our business model they have a larger pool of cars which provides customers a sense of security in the sense that they are guaranteed a car in times of urgency. Our business model would typically stand out in terms of cost and convenience, due to B2C companies are usually heavily sponsored and registered as a company hence their cost of operations are usually much higher, which relate to a higher rental cost due to the nature of B2C as a profit company. Our business model also provides a greater sense of flexibility and convenience as you get to choose cars that are near you instead of fixed places, it could be as near as you local car park. As well as a greater variety of cars available for rent

Competitors (Benefit): Two forms of transport pose as an alternative to our carsharing business model. Public transport (SBS/SMRT) Public transport provides the cheapest alternative to travel around singapore, but it does not provide the convinece/flexibility and comfort of space of driving yourself. Taxi (Comfort/Citycab/Premier Taxi) Taxi(s) provide the same comfort of space of driving for yourself, but the cost of taking a taxi might be higher then car sharing, as an hour of sharing a car would cost on average ($10­$15) a taxi trip dependingly could cost much more then that depending on the distance of the trip. Also, during peak hours it is difficult to secure a cab, unless thru booking or even advanced booking which adds to the costs even more as compared to car sharing. Target market/customers: We have identified 3 main groups of customers. 1. Our main target customers are individuals who seldom needs a car buy drives a few times a month. (housewives/ elders) 2. Freelance workers who only needs drive for a few consecutive weeks at certain hours. (e.g Photographers/designers) 3. Frequent oversea travellers As all 3 groups of customers have one same thing in common, that they have flexible timing but

require the car occasionally. This also applies to customers who are loaners who do not need the car at certain timings. As GPS will be installed in all car for theft prevention, we can use the data of trip logs, distance travelled areas start and end. To generate a profile of customers, with this profile we can determine which areas have the highest loan/borrow rate so we can either use our budget to increase awareness in other areas or focus and develop the area. Before the end of the trip, a short survey will be conducted to rate the trip experience and would they like to see improved? And a periodic email will be sent to gather feedback. As carsharing trends tend to follow the same pattern worldwide, we can look to more established carsharing companies in Britain and North America to look out for the latest trends. Penetrating the market The Primary form of marketing will be through a dedicated website, and broadcasting through social media, such as Facebook, Twitter, Podcasts, Linked and Blogs. Secondary form will be through periodic advertisements over television, radio and posters at public transport areas, such as MRT/ Bus/ Bus Terminals and Taxis. A “bring a friend” reward system will be put in place to attract more customers/loaners through word of mouth.

Stakeholder analysis In this stakeholder analysis, stakeholders identified are : Insurance company who has a high power as the pricing and smooth application of the insurance would directly impact our cost and trustworthiness. Customers(Loaner) who lend out their cars for a profit, they have a high power as they would determine the number of cars available for profit. Customers (Borrowers) are the main drivers of our profit

Sponsor/Investors allow us to expand our business and can determine if we have enough budget to get the latest technology / cheapest promotions so as to have an edge over our competitors.

Competitors are ever improving and we can learn from them and to react/predict to their strategy changes Employees have low power but we have to keep them in our interest to ensure a smooth flow of operations Platform provider, be it applications for handphones or online website, though low in power and interest it would benefit the company greatly to have a top class website that allows high traffic and a eye catching design.

Refrencing

Daryl

3. Business model analysis Revenue sources: ● How many different revenue streams will the business model generate? ● What is the source of each revenue stream (sales, service fees, advertising, subscription)? ● What is the relative size and importance of each revenue stream? ● How quickly is each revenue stream likely to grow? The following are a variety of revenue streams in which this business model will generate, ranging from direct commission of sales and service and subscription fees, other types of less direct revenue streams such as advertising. However, We can expect that more types of revenue streams will be available in the future as innovation continues in this sector. First and foremost, in every business, it is always about the sales that drive a business forward; similarly, this business model's biggest portion of the revenue comes from its sales and service fees. Transaction fees will be collected for each transaction that a car

renter makes by the usage of our car renting services, and commission fees would be collected from car owners who wish to rent out their cars during idling periods. Secondly, a relatively smaller portion of the revenue stream would come from the subscription fees. These are the regular payments for access to information or services provided by our business model. Another form of revenue could come from advertising on our website. As we expect the business to grow, recognition and popularity would increase, and therefore there will be an increase in viewers. This in turn would attract advertising companies to approach us to display their adverts, resulting in commission earned through the number of viewers. Our infrastructure would then be able to provide other companies a platform for advertising. Consecutively, partnerships and collaborations with petrol supplying companies, car maintenance factories, car renting companies and other industry related companies would form an additional part of the revenue stream under sponsorships. Of the revenue streams, sales and service fees is the most important and would be growing the fastest. Since owning a car is going into greater hikes with the higher cost of purchasing a car as well as maintaining one, people would love the service offered to them, as it adds a great value to their lifestyle. It is convenient for car renters to travel from one location to a destination at an affordable cost, and also reduce the burden of owning a car due to the heavy maintenances for car owners.

Cost drivers: ● What cost drivers have the greatest impact on the cost structure? ● Are the costs fixed, semi­variable, variable or non­recurring? ● What is their relative size and importance? ● Will the cost drivers change over time? There is a total of 3 fixed, namely the web control, telephone line and GPS tracking device, and 1 semi variable, being the insurance, cost drivers which impacts this business model. As this business is web­based controlled, there is a need to develop a web site. Cost

incurred in this aspect would include web hosting, web designing and web maintenance. A web domain has to be created in order to allow viewers to access the web site 24/7, additionally, the web site has to be designed uniquely to cater to car owners and car renters needs and must most importantly be user friendly and be periodically maintained, upgraded and updated. For this to work out, IT specialists in the web faulty have to be consulted. A telephone line should also be installed and prepared for 24/7 customer services as it would be the fastest and easiest communication medium between the business and its customers. The biggest portion of the cost drivers would be the GPS tracking devices which have to be purchased. These GPS devices have to be installed into every individual car owners’ vehicles not only for tracking purposes, but also to act as a keyless car access system. To provide our customers with care, the purchase of insurance is a definite must; this is to ensure that we protect both the car owners and car renters’ interests. In any event of case of theft or accidents, the insurance bought would be able to provide a cover. Insurance policies depends on the frequency of such cases happening, which classifies this cost driver as semi variable.

Resource requirements/mapping: ● What resources (e.g., human, physical, financial) are needed? ● Where will you source it from? ● How much will it cost? There are a total of 7 resources needed to start the business. Resources needed Cost Source Web domain $200 Web development and design $500 Web specialist $2000 GPS tracking devices (50pcs) $5,000 Alibaba.com (china supplier)

Insurance policy $3,000 Mechanic $1,750 Total $12,450

Investment size: ● How much cash is required to launch the business model? ● What are the timings of these cash needs? Cashflow Based on the above table, the total amount needed to start the business is $10,450. Additionally, the cash flow statement is as per following.

Critical success factors: ● Which elements of the company’s business model are most important to achieving profit goal? The amount of sales in the revenue stream and cost of GPS devices in the cost drivers are considered as the most crucial elements in the company’s business model as it determines the sustainability of the business. It is important for the business to reduce cost and increase its revenue to hasten the process of first reaching a breakeven point and then on to achieving its profit goal. ● Which of these elements are most difficult to execute? ● Will they change over time? Both the elements mentioned above are equally difficult to execute and will change over time. To achieve an increase in revenue, sales targets must be achieved, volume of customers must be consistently growing, then only there will be more transactions being made. Similarly, to achieve a reduction in cost, more sales is required to generate the

demand for the GPS devices in order to achieve greater buying power to negotiate with the supplier for a lower selling price. There will definitely be changes occurring when the business starts to grow, the amount of sales depends on the volume of customers and cost of GPS devices depending on the amount of sales volume.

Daniel

4. Future action plan Sources of start­up capital: Where can you obtain the money you need to start the business? Consider all sources available to you, such as personal savings, family and friends, bank loans, investors etc. Sources of Start­Up capital All business requires some form of financing. There are a number of ways which these funds can be raised. Following list of sources will be consider and research upon to determine which best suitable for our business model. Personal Savings Personal savings will be the first source which will be considered. As the money is already there for access without any interest, it is the most easily accessible source of capital. Sometime, relying on personal savings may just not be enough; other sources have to be considered as well. Friendship Loan (EnterpriseOne 2005) These are loans from family and friends. Different from financial institutions and banks, they do not need collateral. They provide the loans because they have trust in you. Majority of the time, friendship loans are very flexible. From repayment period to interest rates, everything is negotiable. When the business is going through hard times, it is easier to get your friends and family to extend loans to you. Downside will be that misunderstanding may arise. Hence, a simple agreement draw up by yourself or a lawyer on the terms of the loan and repayment date will be advisable. Most importantly, though our relationship maybe friends and family, but we should treat them as professional investors. By giving them, update on the business plan and progress. Hire Purchase Loan (EnterpriseOne 2005) These are loans which finance purchasing of fixed assets like computers and tracking devices. Basically, it works by buying the item on hire purchase and making regular payments over a fixed period of time. After all the payments are made, then the asset will belong to you. Before that, asset will still belong to the seller. On the positive end, large amounts of cash are not required to purchase the asset. The seller is able to allow small regular payments by the buyer as the ownership still remain his, until all repayments are made. Since the repayments amounts are fixed, it will be easier to manage the cash flow and budgeting. On the negative end, the assets can be taken back if failure in repayment though substantial

amount has been paid for the asset. The investor may end up paying more as interest has to be factor in. Fixed Asset Loan (EnterpriseOne 2005) These are loan to buy fixed asset. The loan is secured by the fixed asset which is purchase, which means it become collateral for the loan. The loan amount may vary with the value of the item purchase. Example of fixed asset loan will be mortgage. If the investor has to buy the property, they can mortgage the property to the bank or any other legal lending institution. Due to the fact that, the loan amount maybe substantial, the lender will have stringent process in screening the credit worthiness and qualitative factors when assessing the application. After assessment, the lender may request to put up additional assets or personal guarantee to secure the loan. The loan repayment period and the interest rate are fixed. If the loan is not serviceable, the fixed asset will be sizeable by the lender. Working Capital Loan (EnterpriseOne 2005) These are short­term loans to increase the company cash flow and fund for the daily operation. Working Capital Loan can be secured or unsecured. For a start­up, we will look into secured loan as generally lenders only give unsecured loans to borrowers whom they consider to be low or no risk and start­up is view as risky. Hence, unsecured loans are unlikely to be granted. A secured loan is backed by an asset or personal guarantee. The amount of collateral needed, depend on the assessment on the ability to pay back the loan. Banks have the same type of working capital loan, just that they given different terms. Following is the type of working capital loan which is suitable for start­up. Example of Working Capital Loan given by government assistance will be the Micro Loan Programme. Overdraft/Line­of­credit (EnterpriseOne 2005) The maximum amount you can overdraw will be the person line of credit. The relationship between the banker and you as well as his assessment of the credit worthiness can greatly impact on the terms and amount. Though the interest pay is only on the amount which is overdrawn but it is usually 1­2% above the bank’s prime rate. Angel Investor (EnterpriseOne 2005) An angel investor invests because they believe in the business and the entrepreneur. They will get a share of the profits proportionate to the shares they own. Angels not only inject funds into the business, they may also bring along their network of contacts which will help the business substantially. In addition, if the angels are well known, they will also give a boost to the business credibility. In finding the right angel, there are a number of matchmakers. One may consider the option in reaching out. Other sources to raise big capital will be venture capitalist or Private Equity funds such as institution funds; independent funds; corporate funds and fund­of­funds. But following sources will not be consider for our business model due to the reason that they are sources which go for high return sector. Government Initiative (EnterpriseOne 2005) Singapore has been pro­actively involving in implementing scheme to support start­up. Following is one of the schemes by the government which we may look into in increasing our business capital.

Action Community for Entrepreneur (ACE) Starts­ups Grant The purpose of the scheme is to provide funding support for first time entrepreneurial Singapore to start and build up their first venture. There are two ways which ACE can provide funding. First, ACE will match $7 to every $3 raised by the entrepreneur for up to $50000. Second, applicable to selected venture, ACE will match $3 to every $7 raised by the entrepreneur for an additional $50000. Total grant is capped at $100000 and the applicant is required to commit a total of $138095 for co­matching. Further information needed: What are you uncertain about? Whom could you ask? Where can you find this information? Further information needed After much discussion, there are some uncertainties that may arise for our business. Firstly, Singapore has been constantly improving the transport system in Singapore. These can be seen by the expansion of rail network to 360km in which 8 in 10 household to be within 10 minutes walk from a rail station (Singapore Press Holdings 2013) and Bus Service Enhancement Programme (BSEP) which have 40 new services introduce and 800 buses added to the existing bus fleet (Land Transport Authority 2012). With all these improvement rolling out, getting to the desire places will be much easier and faster. Hence, considering the economic aspect, it will be cheaper as to take the public transport. Secondly, many households at this time own more than one vehicle (Ong 2010), they may have extra vehicle to share. This is possible for families to own more than one vehicle because Certificate of Entitlement (COE) was purchased at a much lower price back then. Once the COE lease is up, families may not have the financial ability to own more than one vehicle or even a vehicle as the COE has been increasing to a level which owning a vehicle is form of luxury (Tay 2013). Thirdly, there may be possibilities where the government will intervene and legislation may be pass which will impact on the business. To keep ourselves updated on the information or person/organization to seek advice from, we should constantly know what is happening throughout the world not just in Singapore, by reading newspaper and joining networking groups. For our case as first time start up, we can seek advice from ACE which have panel of expertise to address our concern. Support needed: List the individuals or groups you could consult for advice. Consider developing an advisory board consisting of people with experience in your industry and professionals from other industries whom might be expert marketers, for example. Do you have an attorney, accountant, website designer etc. who could help you when needed? Make a list of all the supporting actors your business may need in the future. Supporting Actor Website Designer Role Create a user friendly and easy navigating website. Constantly improving the interface of the

website. IT Support Attorney Troubleshooting IT related issue. Drafting the terms of the contract and amend according. Seeking legal advice if issue arise. Manage the account of the company and prepare for tax submission. Provide 24­hr assistance and enquiry of the customers. To improve online search­engine clicks as well increase the awareness. Sourcing for company which can value add the perks for the customer. Example, discount for servicing the cars, petrol discount and etc. Mentoring and networking in ACE.

Accountant

Hotline assistance

Marketer

Action Community for Entrepreneur (ACE)

References Singapore Government 2013, Singapore Budget 2013, Singapore Government, Singapore, viewed 13th March 2013, .

Shaheen, S & Cohen, A 2012, Innovative Mobility Carsharing Outlook: Carsharing Market Overview, Analysis, and Trends, viewed 01 March 2013 Shaheen, S & Martin, E 2010, ‘Demand for Carsharing Systems in Beijing, China: An Exploratory Study’, International Journal of Sustainable Transportation, vol. 4, no.1, pp.41­55. Ampmwire 2013, AVIS zips up the Car­Sharing Industry, viewed 01 March 2013, Shaheen S & Cohen A, 2007, ‘Growth in Worldwide Carsharing: An International Comparison.’ Journal of the Transportation Research Board , no.1992, pp. 81–89. Carsharingus, 2008, Innovative Carsharing Program in Singapore ends, viewed 01 March 2013, Land Transport Authority 2012, Annual Vehicle Statistics (2002­2012), Land Transport Authority, Singapore, viewed 01 March 2013, . Land Transport Authority 2012, Annual Vehicle Statistics (2002­2012), Land Transport Authority, Singapore, viewed 01 March 2013, . Hampshire R, & Gaites C, 2011, Peer­to­Peer Carsharing Market Analysis and Potential Growth. Transportation Research Record, Vol. 2217, pp. 119­126.

EnterpriseOne 2005, Friendship Loans, EnterpriseOne, Singapore, viewed 13th March 2013, . EnterpriseOne 2005, Hire Purchase Loans, EnterpriseOne, Singapore, viewed 13th March 2013, . EnterpriseOne 2005, Fixed Asset Loans, EnterpriseOne, Singapore, viewed 13th March 2013, .

EnterpriseOne 2005, Working Capital Loans, EnterpriseOne, Singapore, viewed 13th March 2013, . EnterpriseOne 2005, Angels, EnterpriseOne, Singapore, viewed 13th March 2013, . EnterpriseOne 2005, ACE Start­ups Grant, EnterpriseOne, Singapore, viewed 13th March 2013, .

Singapore Press Holdings 2013, More new MRT lines to be built by 2030, Singapore, viewed 13th March 2013, . Land Transport Authority 2012, Bringing You More Buses, Better Rides, Singapore, viewed 13th March 2013, . Tay, C 2013, Cars in Singapore to become a greater luxury, Yahoo! News Singapore, viewed 13th March 2013, . Ong, C 2010, More Singaporeans own at least two cars than before, The China Post, viewed 13th March 2013, .