Ride-Sharing App Released in Hong Kong
Originally posted on Forbes online magazine. Written by Nan-He In.
During Christmas two years ago, Terence Zou found himself stuck in Singapore, with shopping bags in tow. Hours passed and he still couldn’t hail a cab. Zou regretted leaving his car at home. “That incident hit me: it was 2013 and I couldn’t get a taxi, that was really weird,” he recalls. In the end, the Singaporean called a friend who gave him a ride home.
But that stressful episode led to an idea. “There were all these empty cars and no taxis – that was the trigger,” he said on the conception of his carpooling app RYDE, which aims to fill and monetize vacant seats in private cars. The technology has been adopted well in Singapore where it is currently the No. 1 carpooling app with over 30,000 subscribers.
Soon Hong Kongers will have access to this service once it rolls out in the second quarter of this year. RYDE is waiving its annual subscription fee (valued at HK$150) if users sign-up on its website now before its services goes live in Hong Kong in a few months. Zou hopes the app will alleviate some of Hong Kongers’ typical taxi or other transport-related stresses.
Once members subscribe to its network, the platform matches the driver and rider with a common destination. Users can check out each other’s profiles and ratings before embarking on the journey. RYDE’s algorithm calculates the fare -based on the distance- on the principle of cost recovery. “We have an algorithm to assess the cost of the trip, which is based on variable costs such as petrol, [the vehicle’s] depreciation and maintenance fees,” he says. At the end of the trip, passengers pay the driver directly. “In Singapore the economics works out that riders save 50% to 70% of the taxi fare,” says the start-up’s CEO.
Zou is optimistic Hong Kongers will embrace this practice in an era where more people are participating in sharing economy businesses thanks to the rise Airbnb. “People use Airbnb to stay in strangers’ homes and there are many people that do peer-to-peer commerce such as selling goods online where you meet strangers,” he says. The entrepreneur adds, “Carpooling is an extension of the new sharing economy and I think Hong Kongers are open and cosmopolitan to embrace the idea like others have in the rest of the world.”
However the road is growing more competitive as several transportation apps are now available for passengers, such as Uber and HKTaxi. Hopsee, another ride-sharing app just debuted in Hong Kong recently as well. Zou insists his platform is different to those existing players.
Apps for third-party car hires services are participating in an industry segment in Hong Kong of over 18,000 taxis plus a few thousand limousines, chauffeurs, professional drivers and more. Whereas his company is trying to tap the supply of 500,000 private cars in Hong Kong. “The average occupancy of cars in Hong Kong is 1.5 so there are many empty seats in the car to make that journey,” he explains.
His ambition is to expand to other markets. “[Eventually] we will announce plans to develop in other cities with similar demographics, a high penetration of smartphone rates, and places that are tech-savvy as we are a mobile app,” says the tech start-up’s founder. RYDE’s strategy is to offer its services to other Commonwealth markets with regulations similar to Singapore.
Last year, the start-up raised SG$2 million. In its next round of fund-raising, Zou says his company is in the midst of negotiations to garner SG$10 million so RYDE can execute its expansion strategy.
Zou recalls various episodes when his carpooling services helped solve a city’s transportation problems. On November 25 last year, Singapore’s metro-system broke down, which left 70,000 commuters stranded on the North-South line. “There were not enough taxis to cater to such a demand – even Uber drivers were charging SG$150 for its services,” he says. But RYDE’s drivers stepped in. “A lot of our altruistic drivers came forward to ferry people home and carpool, that’s the kind of social good that we can do, and it shows the potential power of our network,” he says. Zou thinks such benefits can happen in Hong Kong.