Car Rental vs. Grab Which One to Use
May 27, 2022
malaysia johor bahru night view

The cost of owning and maintaining a car is on the rise. And, if you live in Singapore or Malaysia, the auto purchase, running, and hidden charges, plus everything in between, are quite significant. Car ownership may require having a gross annual income of at least $7,511.23 in Singapore. That’s why individuals are now shifting to car usership. Then, which one should you use between car rental and Grab? Let’s explore below: –

What Is the Difference Between Ride Sharing and Car Rental?

Ride-sharing is a peer-to-peer car-sharing that operates like a taxi service. The driver, who is also the owner, uses a ride-sharing platform to identify and pick up potential customers. In contrast, auto rental involves individuals renting cars and driving them for a stipulated time.

Ride Sharing in Asia

Ridesharing or ride hailing services are popular in the Asia Pacific region. They are an alternative to traditional taxi services. Here, companies use real-time GPS tracking to match potential passengers with drivers via mobile apps or websites. And, since the drivers escape the typical licensing and regulatory requirements in the taxi industry, ride-sharing becomes a cheaper commute, with shorter waiting time for both the drivers and the passengers.

As the online ride hailing market continues to grow, Consumer Research company ValueChampion estimates that, by the year 2025, the ride hailing industry in Southeast Asia shall be worth USD 42 Billion.

Overview of Grab

Grab is one of the popular ride hailing applications available in Asia. Founded in 2011 in Singapore, the platform offers customized rides to vast destinations for commuters in urban centers. As of 2020, Grab had more than 187 million users and 25 million monthly transacting users. The growth of Grab is partly due to the high urban population, rising income levels, improved digital connectivity, and the spread of urbanization in Asia in recent decades.

 Here is a summary of the features of Grab: –

Android Rating: 4.7

iOS Rating: 4.8

Popular For: Rides, Deliveries, Financial Services, and Hotel Bookings

Current Services: Bookings for taxis, private cars & motorbikes

Current Geographical Market: Malaysia, Singapore, Myanmar, Cambodia, Philippines, Thailand, Indonesia, & Vietnam

Driver-Oriented Features

●     On-demand services & delivery

●     Insurance plan for driver

●     Convenient GPS tracking

●     AI-powered facial authentication protecting drivers-partners

●     Manage profile & view history

Rider-Oriented Features

●     Real-time GPS tracking of driver’s location

●     Sharing trip details with loved ones for safety purposes

●     Convenient cashless payments

●     Manage mobile wallet

●     Subscription plans with extra benefits

●     Gifts and rewards

●     Manage account, view history & give feedback about the app

highway car driving a rented car

Why Is Grab Popular in South East Asia?

Since its launch in 2012, Grab has continually grown and pushed big players like Uber out of South East Asia. Here are some of the contributing factors for its success: –

●     It offers diverse services that include rides, food delivery, airport transfers and financial services

●     All its ride hailing services are accessible via the mobile phone app or website, hence reaching six out of 10 persons underserved by banks in Asia

●     Grab targets the 1.1 billion tech-savvy millennials in Asia

a-young-couple-sitting-in car driving a rented car

Car Rental in Asia

Despite the growth of Grab and other ride-sharing apps in Asia, car rental Johor continues to be their competitive alternative. Vehicle rentals are a better option during peak hours. There is no need to pinpoint unmarked locations while juggling with traffic. Also, riders looking for drivers to pick them up from remote locations may have to wait a little longer for their ride request to be accepted. And there are instances of some drivers deliberately delaying their requests, hoping the riders will cancel them.

Case Scenario: Gem Car Rental Joho[r Bahru

One example of a vehicle rental service that prioritizes the safety of its customers is Gem Car Rental in Johor Bahru. Gem Car Rental rents or leases its fleet of vehicles to its customers at affordable rates. These are clean, well-maintained, and disinfected autos with such traits and contactless dropoff in line with Covid measures. Hence, clients book the auto of their choice online or via WhatsApp. Next, they pick up the vehicle or have it delivered to them by Gem Car Rental. Also, they get exclusive use of the cars for an agreed period, avoiding any exposure or close contact with strangers. And the company maintains all its vehicles as per the state laws to guarantee the safety of its customers. 

Pros of Car Rental

The top benefit of renting an auto is putting the riders’ safety first. Indeed, unlike using ride-sharing apps where riders get into a vehicle with a driver they’ve never met, rental car companies carry out due diligence and background checks to guarantee safety for their clients whenever they rent an auto. And, there have been reports of ride-hailing rides driving dangerously and harassing or verbally abusing customers.

The other advantages to expect when using auto rental over public transport or ride-sharing services are as follows: –

●     The riders pay for only what they use hence money saving

●     There are flexible pick up hours and locations, facilitating last-minute errands

●     All car rentals give the rider comprehensive insurance protection with every booking

Cons of Car Rental

●     Higher rental prices

●     Stricter terms and conditions

●     Riders may pay some additional charges or hidden fees

●     Limited to persons who can drive

female-student poses in rented car

Is Car Rental Cheaper Than Grab?

There is a significant difference between car rental and Grab. Check out a quick comparison of the expected annual costs for owning a car, using car ride services like Grap, and car rental in Singapore: –

1. Average Cost of Owning & Renting a Car

Here are the estimates for owning a car as per the consumer research company ValueChampion: –

Assumptions:-

●     An average commuter vehicle covers four -12km trips each day

●     The Standard Toyota Corolla Altis 1.6 uses 6.5 liters of fuel per 100km

●     Purchase price of the Standard Toyota Corolla Altis 1.6 is between $103,888 and $110,888

●     Purchase Price = $105,000/10 years (the car’s lifespan) = $10,500 per year

●     Annual Insurance Premium = $1,596 (for a brand new car)

●     Servicing/Maintenance Costs = $621

●     Road tax (Assuming it is a 1,600cc engine) =$742

●     Petrol Costs = $2,434

●     Total = $15,893

 2. Average Cost of Ride Sharing Services by Grab

Here are the estimates of using Grab a car in Singapore: –

Assumptions: –

●     An average commuter car covers four -12km trips each day

●     Average speed for the Standard Toyota Corolla Altis = 50km/hr

●     Base Fare =$2.5 per ride

●     Cost per km = $0.5/km

●     Cost per minute = $0.16/minute

Number of trips per year =1,460

Base Fare = $2.5×1, 460 trips = $3,650

Cost per distance (Assuming 17,500kmx$0.5) = $8,750

Cost based on time (Assuming 21,000 minutesx$0.16) =$3,360

●     Total = $15,760

From the above comparison, it is clear that ride-hailing services offer a much cheaper transport option than a car rental. However, other factors like parking fees and credit card schemes push up ride-hailing costs.

funny businessman driving rented retro pedal car outdoor

Bottom Line

The choice between a car rental and ride-sharing services is a matter of personal preference. Grab and other ride-sharing platforms diversify their services to offer a holistic package to their riders. However, car rental Johor like Gem Car Rental, have flexible car rental plans that keep them competitive.