Car-sharing in S. Korea is expanding to all ages beyond 20-30

SOCAR Inc.’s Chief Executive Officer Park Jae-uk [Photo by Lee Seung-hwan]

Car-sharing has become a popular way for people in the city to move around since SOCAR Inc. launched its service in 2011.

The car-sharing startup plans to open up new markets with “SOCAR Plan,” which allows users to rent a car on a monthly basis.

“While the existing short-term car rental market was based on face-to-face and daily rentals, SOCAR has innovated its service to allow for non-face-to-face and 10-minute rentals,” SOCAR Chief Executive Officer Park Jae-uk said in an interview with Maeil Business Newspaper last Thursday.

“SOCAR did not rest on its laurels and created a new one-month mid- to long-term car-sharing model in the long-term car rental market, which is currently stuck at 24, 36 months or more.”

In fact, SOCAR’s car-sharing service, which allows users to rent vehicles in 10-minute increments with a 30-minute minimum, has quickly absorbed daily rental demand, as well as short-term needs such as commuting and temporary vehicle needs, and now control about 80 percent of this market.

In addition, SOCAR is taking the lead in the industry by proactively launching a one-month car rental model, a service that is in demand among car owners and the mid- to long-term rental market but has been absent as a service.

“Long-term rental cars basically have a long contract period of at least one year, and the fees and penalties for early cancellation are surprisingly high, and you have to pay a deposit and advance payment, which is what SOCAR Plan addresses,” said Park.

Park’s prediction was spot on. Launched in October 2019, SOCAR Plan has been successful in absorbing some of the consumers who were tired of the existing long-term car rental services in the market. As of this month, SOCAR Plan has accumulated nearly 30,000 contracts.

“The convenience of SOCAR Plan is that the rental rate is fixed for all vehicles, so there is no need to consult or quote separately,” said Park. “This is a perfect fit for our customers, especially those who don’t want to deal with complicated service procedures and prefer a non-face-to-face experience.”

“We’ve been testing the SOCAR Plan business model over the past quarter and have found that there is sufficient market demand, and our goal is to grow this market more aggressively going forward.”

According to SOCAR, 60 percent of SOCAR Plan customers are primarily using the plan for daily transportation, including commuting (42.5 percent) and work (18.9 percent), while the remaining 25 percent are using the plan monthly for a variety of purposes, including pre-purchase test drives (10.0 percent), leisure and recreational activities (8.8 percent), and waiting for a new car (6.1 percent).

“We expect SOCAR Plan sales to more than triple this year compared to last year,” Park projected.

“Before the launch of SOCAR Plan, the user base was overwhelmingly dominated by people in their 20s and early 30s, but now it is evenly distributed across all age groups, which shows that SOCAR’s car-sharing service covers a wide range of needs from short-term to mid- to long-term.”

Currently, 29 percent of SOCAR members are over 40 years old. This age group has expanded by more than 15 percent compared with a year ago. SOCAR Plan users are also aged over 30, accounting for 76 percent of the total. What is also notable is the growing use of car-sharing, even among those who own their own cars.