Socar is the largest car sharing service in South Korea which has a website and smartphone applications that allow travelers to book and share cars with others traveling in the same route. It is based in Bussan, Korea. The company seeks to improve the society through environmentally responsible transportation options. It is dedicated to an eco-friendly economy which reduces pollution by contributing to transportation options which allow people to share cars without really owning them. Pioneering the B-corporation status for its industry, Socar plans to develop a media campaign to publicize and gain support for ridesharing practices. As part of this campaign, the company will advertize the benefits of ridesharing as it solves traffic and parking problems, especially in densely populated cities like Seoul. Part of the companies vision, as they imagine the future, is to have more car-sharing participants than car owners within the cities they operate.
The company believes that ride-sharing options will change the way people think about car ownership and ultimately, hopefully, reduce cars on the road.
How it works:
Users sign up and receive a card key which enables them to borrow cars located in Seoul and every major cities Korea. Members can also reserve a car through the mobile app and adjust their rental times by ten-minute intervals, giving them a great deal of convenience and cheaper payment options. Similar to famed car-sharing apps like zipcar, Socar finds a car located close to the user, who then picks it up for the amount of hours they desire.
FOUNDERS OF COMPANY
Socar Company was founded by Jimahn Kim, a former investment banker at Woori Investment and Securities. Mr. Kim is a Hayang university Business Administration graduate who also earned his Master of Business Administration in Korea University. He previously worked at Daum Communication, in the Strategy & Planning division. When he told his friends about his plans to quit his banking job and start a car-sharing business, the first of its kind in Korea, they tried to stop him. They considered it a risky business and said it was filled with the possibility of having dishonest customers who could steal cars or fake accidents. Besides, Korea’s existing rental companies had predicted that demand for such a car sharing service would be quite low. However, Jimahn held his ground. He was convinced that the service would do well and the issues his friends pointed out could be resolved through utilization of smartphone devices and social networking services. He proceeded to form the company Socar which is now Korea’s number one car sharing service and he is its chief executive officer.
History of company:
Jimahn Kim first established Socar in Jeju in November, 2011. He thought the island was ideal for a car-sharing service since most of its residents owned multiple cars to compensate for a lack of public transportation. The car rental services which were in existence in Jeju were only popular during the summer. There were also challenges, particularly with government regulations which required a car-sharing business operator to own at least 100 cars before launching the business. He, however, dealt with the government regulations, and eventually started the service in March, 2012. The company then expanded to Seoul and created car sharing communities through the internet. Socar organized off-line meetings with loyal customers in order to get their feedbacks and opinions about the service. They shared photos of satisfied customers in borrowed cars on social networks like Facebook and twitter. Since its launch in 2012, Socar’s services have increased and continued to meet the demands of a culture that appreciates convenience. Starting out with just 100 Hyundai Sonatas, the company has expanded within the last two years to own a fleet of more than 1000 vehicles, shared among up to 50,000 users in Korea. It was considered one of 100 Thriving Startups in 2013 by startup portal Demoday and is known for bringing unparalleled value to Korean drivers.
The investors of Socar Company have noticed its exceptional growth potential with the company achieving $30 million in annual sales in 2014. Bain Capital, a private US investment company worth $80 billion in assets under management, led a series A investment round worth US$18M into Socar. SK and Brookside Capital also made a series B investment round worth $US56M into the company in October 2014. Socar used these investments to secure required vehicles and parking infrastructure. The firm has increased its total number of vehicles from 1,400 to 3,200. This shows a rise of 229%. There has also been an increase in the total number of locations served from 800 to 1,800, indicating a rise of 225%. Total user numbers have also increased from 300 thousand users to more than 1.3 million, showing 433% rise. This new investments have also been used to develop on demand mobility platforms. These enable any car sharing requests within the country to be responded to within 10 minutes. The on demand platform has been successfully sustained through increase in number of users and strategic acquisitions.
Socar has shown a steady growth in the Korean market. According to the firm’s records, the service’s revenue in 2014 was about 14.7 billion won, showing a 588% rise from its previous 2.5 billion won in 2013. The operating loss was 1.49 billion won both in 213 and 2014. The company’s net loss also increased from 1.53 billion won in 2013 to 1.73 billion in 2014. Sokar’s operation cost also showed an increase from 1.3 billion won in 2013 to 7.7 billion won in 2014, and its cars insurance increased from 200 million won in 2013 to 1 billion won in 2014. Initially, customers rented a car for 30 minutes and received a service extension of up to 10 minutes. Today the company uses GPS devices attached to the car, to automatically calculate the driving distance, minutes, and the fuel consumption. The service is automatically charged through the mobile application using the customer’s credit card. The company offers its mobility solutions to various customers whether individuals, institutions or businesses. It delivers services in various metropolitan areas in Korea. This has enabled it to have a large base of clients signing up for the service every minute, with up to 50,000 rides booked monthly.
Socar Company has headquarters in Bussan, Korea. It is a dominant company with vehicles in every major city, especially Seoul. Being the leading car sharing company in the Korea, Socar owes its success to the country’s exceptional high population and advanced technology. Excellent transportation infrastructure has also boosted Socar’s rapid growth. The company is deeply rooted in the Korean market with up to 26 million users in Seoul alone. It has also dominated other towns in the country. It considers applying is experience and success in future to obtain more market in regions similar to Korea in terms of smart phone usage, technological adoption rates and public transport network across Asia. This include, China, Singapore and Japan.
Socar is officially recognized among its peers not only because it is the largest car sharing service in South Korea, but also because it is the first company in the industry peers to be certified as a Benefit Corporation. Competitive car-sharing services were are offered by other car rental companies such as KT Rental. Uber also offers threats to the company in the very competitive market but its struggles in legal issues in Seoul government has been an advantage to the Socar Company in terms of market competition. The total market size is around 30 billion to 40 billion Won. With many competitive companies, the marketplace may become saturated. However, Socar, as the current leader, looks forward to launch the business in the global market. Which is a good ideas as research forecasts that the global car sharing market will grow at a compound annual growth rate of 41.35% between 2013 and 2018.