SINGAPORE: BlueSG's move to suspend operations were likely influenced by losses caused by an ageing fleet, but its brand could take a hit from such a move even as the Singaporean car-sharing service plans a return in 2026, experts say.
The firm on Monday (Aug 4) announced a sudden "strategic pause" of their electric vehicle (EV) point-to-point car-sharing operations starting from Friday, as it works to upgrade its infrastructure.
BlueSG will also be laying off a portion of its workforce, though it did not state how many will be affected.
Its new service will involve a new platform, a refreshed fleet with a new range of vehicles, an expanded network of pickup and drop-off points, as well as "greater reliability and a smoother user experience", the company said.
BlueSG is the only car-sharing platform that offers point-to-point services in Singapore.
“They could have just continued operations and added the right vehicle fleet mix and changed policies and so on,” said Associate Professor Walter Theseira at the Singapore University of Social Sciences.
“But my suspicion is that they must have concluded that the cost of continuing to keep the fleet in operation as well as operating costs just vastly outweighed any benefit in (operating for) the next couple of months,” he added.
“It was better to draw a line underneath this and then change everything.”
Agreeing, Associate Professor Jawn Lim from the Singapore Institute of Technology likened BlueSG continuing operations while revamping infrastructure to “moving into a half-renovated home”.
“The issues from an incomplete and dusty interior could be more disruptive than waiting until the renovation is fully completed and cleaned,” he said.
“There may be more costs incurred to maintain the current BlueSG service than taking the ‘strategic pause’.”
BlueSG’s annual financial statement from the Accounting and Corporate Regulatory Authority (ACRA) website showed a net loss of S$31.1 million (US$24.2 million) between January 2023 and March 2024. This was after a net loss of S$11.4 million between January and December 2022.
Auditor EY noted that the company had changed its financial year end from December 2023 to March 2024 - and that the figures were "not entirely comparable" as they now covered a period of 15 months instead of the previous 12-month stretch.
The accounts for the financial year ending March 2025 are not available yet.
Founded in 2017, BlueSG was sold in 2021 to Goldbell, a local vehicle leasing company. Goldbell announced then that it would be investing S$70 million in BlueSG, and even expressed hopes for overseas expansion.
According to its financial statement, Goldbell recorded a profit of S$24.2 million between April 2021 and March 2022; and S$6.2 million between April 2022 and March 2023.
But between April 2023 and March 2024, it recorded a loss of S$3.4 million.
Asked by CNA about the move to suspend operations and the role played by mounting losses, BlueSG CEO Keith Kee said the decision “stems from a forward-looking review of how best to meet the evolving demands of shared mobility in Singapore”.
While pausing operations could help save costs, intangibles such as consumer trust in the BlueSG brand could be hurt, said Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore (NUS).
“Whether they are upgrading or not, a total stoppage will result in lost revenue, lost users and given the layoffs ... it will have an impact on the credibility of the company,” he said.
Mr Kee said “serious consideration” was given to keeping the BlueSG service running while rebuilding in parallel.
“But (we) ultimately recognised that this would divide our efforts and risk further disruptions for users,” he added. “Taking a short, planned pause now gives us the focus needed to return faster - and stronger.”
BlueSG founder Franck Vitte, who served as the firm’s managing director until 2021, told CNA he believes the firm's transition to a new IT system in 2023 proved to be more challenging than anticipated.
The new system had led to disruptions and left users frustrated over issues such as difficulty ending rentals.
It is possible that back then, BlueSG needed to “completely redesign its system architecture to enhance customer service and achieve financial sustainability”, said Mr Vitte, who is now the MD of TotalEnergies, BlueSG's charging network.
“At the same time, its vehicle fleet was ageing, and maintaining the Bluecars had become increasingly difficult, particularly since production of the model ceased several years ago."
Mr Kee, the CEO, said: “When we first took over the service, we inherited a legacy system. A major milestone for us was the successful migration to a more robust, insight-driven backend - which allowed us to stabilise operations and deliver steady growth in subscriptions and rentals.
”That migration also revealed the limitations of the existing infrastructure - especially as new technologies emerged and demands accelerated,” he added.
”It became increasingly clear that a full platform upgrade was needed to meet future demands with greater agility, efficiency and scalability.”
Associate Professor Raymond Ong from NUS also pointed to fast-developing advancements in the EV landscape, and how that combined with an ageing fleet for a “double whammy” for BlueSG.
Charging points have since become more widespread islandwide, yet BlueSG cars can only be charged at specific stations.
This puts a lot of cost pressure on the firm, said Assoc Prof Ong.
“It could be better for BlueSG to work with a power company to come up with a better funding mechanism for their charging infrastructure,” he said. “All this has to be looked into as the EV market is changing so fast.”
He also noted that BlueSG’s ageing cars now have shorter range compared to newer EVs.
The company did attempt to refresh its fleet in 2022, by adding 500 Opel Corsa-e cars.
Assoc Prof Theseira said this could have been a misstep.
“For whatever reason, they decided to go with a European model instead of going for, for example, a Chinese model, which everybody knows is not only enjoying a lot of popular support in Singapore, but is also likely to be cheaper,” he said.
The abrupt cut-off of BlueSG operations will be felt by its thousands of users.
On one community Telegram Channel, news of the pause led to several users leaving notes of appreciation, citing how they had come to rely on the service. Some hoped BlueSG would come back stronger next year.
Prof Loh from NUS believes BlueSG users will likely turn to other car-sharing firms or fall back on ride-hailing - possibly even causing temporary price increases in those services.
“If demand is more than supply, there could be potential for price increases (and) more surge pricing (during peak hours),” he said.
Assoc Prof Theseira had a different view.
“If (BlueSG) had embarked on this move, they must have seen from the operating numbers that basically, demand was not there, or not there to sustain operations,” he said.
“So what is the effect, then, of removing what is now a more marginal player with depressed demand? Not much effect, right?”
01:11 Min
As Singapore’s only point-to-point car-sharing service, BlueSG's pause has invited questions of whether the model is sustainable at all.
Assoc Prof Theseira called the point-to-point modality the “holy grail” of car-sharing - because it opens up to a much larger market, compared to one where rented cars have to be returned to the same place.
“But the problem here is that point-to-point also requires a sufficient density in your network, as well as systems - both operating and pricing-wise - to actually encourage proper circulation of cars,” he said.
He likened BlueSG's issues to those faced by bicycle-sharing firms - where the vehicles do not always spread themselves across the island evenly, due to demand patterns.
For instance, in Singapore people typically work, play and live in distinct areas. This means that BlueSG cars in use are typically moving from one place to another, rather than circulating.
“Who comes (to a Housing Board estate) to work or play? Everyone in those estates goes to work and play in the town area,” said Assoc Prof Theseira.
This differs from cities like Tokyo, where its suburbs are a mix of residences, workplaces and leisure spots.
“Somebody may live in part A of Tokyo and go and play or work in part B; and somebody who lives in part B might go and work or play in part A,” said the transport economist.
In general, the car-sharing market is difficult to sustain, as also seen in other parts of the world, he pointed out.
Earlier this year, US car-sharing firm Getaround abruptly shut down operations, citing financial difficulties.
In 2018, French point-to-point EV car-sharing firm Autolib also ceased operations after chalking up major losses.
Despite the current headwinds, former BlueSG executive Vitte hopes the firm he founded can bounce back.
“I believe that car-sharing has a natural place, especially in a city like Singapore, where it perfectly complements the existing transport options,” he said.
“I remain hopeful and confident that a new car-sharing service will emerge in the coming months, one that applies the lessons of the past to deliver a high-quality experience for Singaporean commuters.”
Continue reading...
The firm on Monday (Aug 4) announced a sudden "strategic pause" of their electric vehicle (EV) point-to-point car-sharing operations starting from Friday, as it works to upgrade its infrastructure.
BlueSG will also be laying off a portion of its workforce, though it did not state how many will be affected.
Its new service will involve a new platform, a refreshed fleet with a new range of vehicles, an expanded network of pickup and drop-off points, as well as "greater reliability and a smoother user experience", the company said.
BlueSG is the only car-sharing platform that offers point-to-point services in Singapore.
“They could have just continued operations and added the right vehicle fleet mix and changed policies and so on,” said Associate Professor Walter Theseira at the Singapore University of Social Sciences.
“But my suspicion is that they must have concluded that the cost of continuing to keep the fleet in operation as well as operating costs just vastly outweighed any benefit in (operating for) the next couple of months,” he added.
“It was better to draw a line underneath this and then change everything.”
Agreeing, Associate Professor Jawn Lim from the Singapore Institute of Technology likened BlueSG continuing operations while revamping infrastructure to “moving into a half-renovated home”.
“The issues from an incomplete and dusty interior could be more disruptive than waiting until the renovation is fully completed and cleaned,” he said.
“There may be more costs incurred to maintain the current BlueSG service than taking the ‘strategic pause’.”
BlueSG’s annual financial statement from the Accounting and Corporate Regulatory Authority (ACRA) website showed a net loss of S$31.1 million (US$24.2 million) between January 2023 and March 2024. This was after a net loss of S$11.4 million between January and December 2022.
Auditor EY noted that the company had changed its financial year end from December 2023 to March 2024 - and that the figures were "not entirely comparable" as they now covered a period of 15 months instead of the previous 12-month stretch.
The accounts for the financial year ending March 2025 are not available yet.
Founded in 2017, BlueSG was sold in 2021 to Goldbell, a local vehicle leasing company. Goldbell announced then that it would be investing S$70 million in BlueSG, and even expressed hopes for overseas expansion.
According to its financial statement, Goldbell recorded a profit of S$24.2 million between April 2021 and March 2022; and S$6.2 million between April 2022 and March 2023.
But between April 2023 and March 2024, it recorded a loss of S$3.4 million.
Asked by CNA about the move to suspend operations and the role played by mounting losses, BlueSG CEO Keith Kee said the decision “stems from a forward-looking review of how best to meet the evolving demands of shared mobility in Singapore”.
While pausing operations could help save costs, intangibles such as consumer trust in the BlueSG brand could be hurt, said Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore (NUS).
“Whether they are upgrading or not, a total stoppage will result in lost revenue, lost users and given the layoffs ... it will have an impact on the credibility of the company,” he said.
Mr Kee said “serious consideration” was given to keeping the BlueSG service running while rebuilding in parallel.
“But (we) ultimately recognised that this would divide our efforts and risk further disruptions for users,” he added. “Taking a short, planned pause now gives us the focus needed to return faster - and stronger.”
Related:
"DOUBLE WHAMMY"
BlueSG founder Franck Vitte, who served as the firm’s managing director until 2021, told CNA he believes the firm's transition to a new IT system in 2023 proved to be more challenging than anticipated.
The new system had led to disruptions and left users frustrated over issues such as difficulty ending rentals.
It is possible that back then, BlueSG needed to “completely redesign its system architecture to enhance customer service and achieve financial sustainability”, said Mr Vitte, who is now the MD of TotalEnergies, BlueSG's charging network.
“At the same time, its vehicle fleet was ageing, and maintaining the Bluecars had become increasingly difficult, particularly since production of the model ceased several years ago."
Mr Kee, the CEO, said: “When we first took over the service, we inherited a legacy system. A major milestone for us was the successful migration to a more robust, insight-driven backend - which allowed us to stabilise operations and deliver steady growth in subscriptions and rentals.
”That migration also revealed the limitations of the existing infrastructure - especially as new technologies emerged and demands accelerated,” he added.
”It became increasingly clear that a full platform upgrade was needed to meet future demands with greater agility, efficiency and scalability.”
Associate Professor Raymond Ong from NUS also pointed to fast-developing advancements in the EV landscape, and how that combined with an ageing fleet for a “double whammy” for BlueSG.
Charging points have since become more widespread islandwide, yet BlueSG cars can only be charged at specific stations.
This puts a lot of cost pressure on the firm, said Assoc Prof Ong.
“It could be better for BlueSG to work with a power company to come up with a better funding mechanism for their charging infrastructure,” he said. “All this has to be looked into as the EV market is changing so fast.”
He also noted that BlueSG’s ageing cars now have shorter range compared to newer EVs.
The company did attempt to refresh its fleet in 2022, by adding 500 Opel Corsa-e cars.
Assoc Prof Theseira said this could have been a misstep.
“For whatever reason, they decided to go with a European model instead of going for, for example, a Chinese model, which everybody knows is not only enjoying a lot of popular support in Singapore, but is also likely to be cheaper,” he said.
IS THERE DEMAND?
The abrupt cut-off of BlueSG operations will be felt by its thousands of users.
On one community Telegram Channel, news of the pause led to several users leaving notes of appreciation, citing how they had come to rely on the service. Some hoped BlueSG would come back stronger next year.
Prof Loh from NUS believes BlueSG users will likely turn to other car-sharing firms or fall back on ride-hailing - possibly even causing temporary price increases in those services.
“If demand is more than supply, there could be potential for price increases (and) more surge pricing (during peak hours),” he said.
Assoc Prof Theseira had a different view.
“If (BlueSG) had embarked on this move, they must have seen from the operating numbers that basically, demand was not there, or not there to sustain operations,” he said.
“So what is the effect, then, of removing what is now a more marginal player with depressed demand? Not much effect, right?”
01:11 Min
IS THE BLUESG MODEL TENABLE?
As Singapore’s only point-to-point car-sharing service, BlueSG's pause has invited questions of whether the model is sustainable at all.
Assoc Prof Theseira called the point-to-point modality the “holy grail” of car-sharing - because it opens up to a much larger market, compared to one where rented cars have to be returned to the same place.
“But the problem here is that point-to-point also requires a sufficient density in your network, as well as systems - both operating and pricing-wise - to actually encourage proper circulation of cars,” he said.
He likened BlueSG's issues to those faced by bicycle-sharing firms - where the vehicles do not always spread themselves across the island evenly, due to demand patterns.
For instance, in Singapore people typically work, play and live in distinct areas. This means that BlueSG cars in use are typically moving from one place to another, rather than circulating.
“Who comes (to a Housing Board estate) to work or play? Everyone in those estates goes to work and play in the town area,” said Assoc Prof Theseira.
This differs from cities like Tokyo, where its suburbs are a mix of residences, workplaces and leisure spots.
“Somebody may live in part A of Tokyo and go and play or work in part B; and somebody who lives in part B might go and work or play in part A,” said the transport economist.
In general, the car-sharing market is difficult to sustain, as also seen in other parts of the world, he pointed out.
Earlier this year, US car-sharing firm Getaround abruptly shut down operations, citing financial difficulties.
In 2018, French point-to-point EV car-sharing firm Autolib also ceased operations after chalking up major losses.
Despite the current headwinds, former BlueSG executive Vitte hopes the firm he founded can bounce back.
“I believe that car-sharing has a natural place, especially in a city like Singapore, where it perfectly complements the existing transport options,” he said.
“I remain hopeful and confident that a new car-sharing service will emerge in the coming months, one that applies the lessons of the past to deliver a high-quality experience for Singaporean commuters.”
Continue reading...