Why Uber drivers in Singapore overwhelmingly rent cars

McQueen Rentals, a car rental company in Singapore explains why most Uber drivers in Singapore rent rather than own cars.
Virtually all Uber drivers in Singapore rent cars rather than own their own cars. It is estimated that over 90 percent of all Uber cars in Singapore are rental cars rather than self-owned. This may be the highest percentage in the world.

This is a parallel to the fact that taxi medallions cannot be owned by individuals in Singapore

It is estimated that above 90 percent of all Uber cars in Singapore are rented rather than self-owned.

As a result Uber has a 100 percent owned subsidiary Lion City Rentals - a play on the name of Singapore, Singapore is know as the Lion City which rents out cars. To date, Uber does not have any other countries with a car rental business.

The car population at the end of 2015 was 579k. According to the Straits Times, approximately 44 per cent of households in Singapore in 2015 own at least one car. This implies that out of the approximate 1.2 million households in Singapore, about 528,000 households have at least one car.

But car prices are astronomical in Singapore and they are largely out of reach of the lower income group.

In fact, if we assume that there is a strong overlap between Uber X drivers and taxi drivers, the income of taxi drivers in Singapore is informative. As Minister Tan Chuan Jin ssaid in2014, the average monthly pay of a single shift taxi driver was SGD 3,173.

This is low versus the cost of a car. If we take the cost of a 9 year old car, the cost of a 9 yr car is in the region of say 18,000 to 25,000 Singapore dollars, which is out of the reach of most people who drive Uber X especially when financing is hard to come by for 9 year old cars. Another example, a brand new Mercedes 250 for Uber Exec costs at least 220,000 Singapore dollars.

One of the downsides about this is that Uber drivers make less money than they could because the profit margin from the rental comes out of their income.