How Carzuno is the Netflix for cars and why it works
This first car subscription platform in Singapore seeks to provide an alternative to car ownership.
When subscription-based models are brought up, the majority point to Netflix or HBO Max for video consumption and Spotify or Apple TV for music. For a low price, multiple options are presented for customers to choose from at the touch of a button or tap on a screen. Two former Grab executives thought of a different use for the model.
Andrew Chan and Amrt Sagar developed Singapore’s first subscription-based car rental platform called Carzuno.
“With the whole world changing and moving digital, car leasing has not changed much. And that's where I see me and my co-founder realise that actually there is a space for car subscriptions,” explained Chan in an exclusive interview with Singapore Business Review.
Traditionally, consumers either purchase or lease vehicles. Buying a car meant dealing with the minimum payment of at least $10,000 for the certificate of entitlement (COE) alone. Adding on to that would be expenses like taxes and the depreciation of their personal vehicle. On the other hand, renting a car meant paying a daily rental rate that could add up over the long term.
Chan saw all of these inconveniences as something that could be avoided through Carzuno, an alternative option that could make it easier and accessible for Singaporeans to own a car for the long term.
What’s in a name
The founders, both veterans in the industry, coined the name Carzuno by combining the two words ‘car’ and the Spanish word for one, ‘uno’. It was fitting, then, that the start-up is Singapore’s first subscription-based car rental service.
A customer’s review summarised how Carzuno worked: “I always thought it was very complicated to get a car in Singapore. Then I saw Carzuno’s ad online, found an excellent car at a great price, picked how many months I wanted to subscribe, paid online and uploaded my and my partner’s driver’s licences. Great customer service throughout the whole process.”
One thing that sets Carzuno’s pricing apart from other car rental businesses employing a daily rate, is that it includes the insurance in the customer’s monthly bill, as well as a 24/7 roadside assistance program and taxes.
The use of a digital platform also addressed one of Chan’s initial comments on the rental process. If one were to go through the traditional route, multiple trips to the showroom would be needed, with negotiations with dealers often taking longer than usual. With Carzuno, consumers can sign up, choose a car, and pay within a matter of minutes. One-, six-, 12-, and 24-month subscription plans are available. The car is then delivered to the consumer within one to two days from the transaction.
“We are the only platform that's neutral, meaning there is no brand preference. We are here to consolidate everybody, and that allows us to have a range of stocks as well as pricing,” said Chan.
In other words, over 60 models can be found in Carzuno’s catalogue, from Japanese hatchbacks to German-manufactured vans. Meanwhile, other rentals primarily partner up with other car manufacturers, resulting in a car roster primarily populated by that brand.
To further grow the current subscriber base, its talent roster, and the product itself, the startup entered into pre-seed funding round and received $674,655 (US $500,000). Lead investors for the start-up’s funding round include Net Ventures and Hustle Fund, as well as private investors in the automotive and ride-hailing sectors. According to Chan, the start-up even proved popular enough that they were over-subscribed.
Going forward, Chan looks toward expanding into Southeast Asia over the next five years. As early as now, he is gearing up for a different set of challenges beyond Singapore’s unique automobile market.
For instance, with Thailand and Indonesia, a larger delivery area is required. On the other hand, the same countries present a less volatile market and have the opportunity to provide more transparent pricing due to a wider range of aging cars.
But for Chan and Carzuno? It’s the next mile in a long drive.