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SMRT’s private car business move: Better late than never?

SMRT is venturing into the on-demand private car hire service which will put it amongst the likes of other ride-sharing platforms such as Uber and Grab. This will be done through its wholly owned subsidiary, Strides Transportation.

The move into private car hire business will see SMRT offer limousine services, chauffeured services and car rental services to fulfil a growing market demand in Singapore.

Offering limousine services with luxury vehicles such as the Lexus ES Hybrid and Toyota Vellfire for up-market and corporate clientele, Strides will also progressively roll out a fleet of 300 brand new Toyota Altis sedans, to provide chauffeured and car rental services, over the next six months.

“There is a growing preference amongst commuters for on-demand point-to-point transportation, a demand that Strides will be able to fulfil. Our drivers and clients will benefit from Strides’ synergy with SMRT Taxis’ successful operations, drawing from its experience in managing transportation fleets and drivers,” Benny Lim, managing director for SMRT Roads said.

“We will also provide support to drivers in the form of a drivers’ helpline and training courses. Customers will be assured of safe and reliable travel options with Strides, and our customers will have ‘a whole fleet at your call’.”

Nick Foley, president of Landor SE Asia Pacific & Japan feels this is what an agile brand must do to stay competitive and to offer services that extend to car rental and chauffeured services is ‘on brand’ behaviour from SMRT.

“SMRT is well known for a variety of transport options in Singapore. This action suggests it is able to adapt to changing market conditions. Uber has dramatically changed the taxi industry in a short period of time. By adopting a leading approach to new services, SMRT is demonstrating its ability to shift with the times,” said Foley.

The public transport operator has inked a one-year partnership with Grab’s GrabCar booking platform to allow 200 Stride drivers to take on bookings exclusively from the app to enjoy additional performance-related cash incentives each month starting from April 2016. Through this partnership, Strides will be one of GrabCar’s preferred transport partners, providing GrabCar with more drivers and a brand new fleet to better fulfil an increasing demand.

“The fleet will draw on the expertise and technology that both parties offer, expanding the available driver supply pool for commuters with brand new vehicles, while also enabling drivers to have access to increased bookings, competitive rental rates, and professional training and support,” said Lim Kell Jay, head of Grab Singapore.

Lawrence Chong, chief executive officer of Consulus thinks that leading brands Grab and Uber have already established themselves in the market in terms of the number of drivers, usage and brand awareness so SMRT’s move is late on the bandwagon.

“It is late but it does not mean that SMRT cannot offer an option for customers. So I believe they are not aiming to carve out a leadership position but more as a value-added service,” Chong said.

Chong adds that the challenges faced do not lie in attracting customers but rather how many drivers SMRT can recruit within the year to really be a game changer.

“If it does not have enough drivers then it will not be able to compete well for customers. The idea is good but the challenge is how do you come up with an attractive programme for the drivers?” he said.

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