SINGAPORE - With the rise of ride-booking services like Uber and GrabCar, a lot more rental cars are now on the road.
Statistics from the Land Transport Authority (LTA) show that there were 24,573 rental cars as of August - a 38 per cent jump from 17,786 in August last year. At the end of 2013, the figure stood at 16,396; in 2012, it was 14,862.
Rental cars are defined as those leased out for personal use or for private chauffeuring purposes.
Industry observers say it is likely that the second group is driving the boom in rental car numbers, given the growth of Uber and GrabCar.
Both are seen to be competing with taxis, leading the Government to announce this month a review on whether they have been competing fairly.
Mr Peter Cheong, president of the Vehicle Rental Association, said: "If we are just looking at the population growth in the last 12 to 18 months, we are inclined to say that the apps-based model of limousine services has been the leading cause for the accelerated growth."
When drivers sign up to drive for ride-booking services Uber and GrabCar, they are given the option of using their own car or renting one - as long as the vehicles are commercially insured and registered.
The latter option is more popular, given that it is expensive to own a car here. Also, rental firms charge as little as $60 a day for a basic saloon model and look after the maintenance and servicing of the cars.
Mr Chan Park, Uber's general manager for South-east Asia and strategy and operations lead, said drivers sign up as employees of the rental firms or set up a chauffeur business, and then rent the cars.
Mr Chan added that 85 per cent of its drivers opt for a rental car as it involves "less upfront costs".
A check on Uber's website shows that it has 29 rental firm partners. Rival GrabCar does not publicly list its partners, only saying it has "a few".
Not only has the number of rental cars gone up, but there are also more car rental companies now.
Mr Adrian Lee, co-founder of online rental portal Drive.SG, estimates that there are now over 180 car rental companies, with 30 to 40 of them registered in the last year.
"And 90 per cent of them are small firms. I call them micro car rental companies because they have small fleets of two to 10," said Mr Lee.
Industry players believe many of the new firms are set up to serve the Uber and GrabCar market. Since they have little financial muscle to acquire new cars, they buy vehicles due to be scrapped and convert them from a personal-use classification to one for rental.
For the first half of this year, there were 3,143 conversions to a private-hire classification - around 63 per cent more than the 1,933 for the whole of last year, according to LTA figures.
But the size of Uber and GrabCar's fleets is anyone's guess. An industry source who declined to be named said the organic growth of the rental car pool had previously stayed consistent at 7 to 10 per cent annually. It is impossible to differentiate between those for self-drive and those for chauffeuring, he said.
An LTA spokesman said: "Both categories of private-hire cars can be used interchangeably as public service vehicles, as long as the cars have the appropriate insurance."
National University of Singapore transport researcher Lee Der- Horng calls the boom in this market of private chauffeur cars an "unhealthy trend" that could undermine the taxi industry.
Dr Lee said that private chauffeuring was once a distinct industry from taxis but, because of Uber and GrabCar, these for-hire cars act almost like a "cab booking service".
Given their age, these cars may not be as well-maintained as those of a taxi company's fleet, leading to safety issues for passengers, he said.
When asked, GrabCar's regional head Lim Kell Jay said every car is inspected. Uber's Mr Chan said rental firms are "incentivised" to maintain their cars to avoid repair costs and to ensure their fleets are well-used.
Despite the controversy surrounding these private "taxis", commuters here say they have benefited from them. Investment analyst Ong Boon Han, 35, said: "During the peak hours, when it is hard to get a cab, these private cars help to fill the gap."