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Carpool Singapore. Get the facts



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More Singaporeans are turning to providing carpooling services for extra income. What are some of the things you need to know before you start freelancing as a carpool driver?

Adhere to the guidelines

The LTA has strict guidelines for carpool drivers.

  • You must make sure that you only use your car for carpooling services if it is incidental to your everyday use of the car.
  • You must do so not more than twice a day.
  • The money earned from you carpooling service has to be channelled into maintaining your car. For example, it has to be used for fuel costs and repairing wear and tear.
  • The rides cannot cost more than the above expenses incurred for adding carpool passengers to your commute.
  • Passengers cannot be scouted in a parking lot or the side of the road. You must pick up your passengers at a point designated by them.
  • You must go with the rate your carpool app sets (usually based on distance), even when your passenger brings along other riders.

Go for longer commutes

Given that apps like GrabHitch charge between $5 to $15 per ride, a carpool driver could earn between $2,500 and $7,500 a year should they offer carpool rides twice a day, five days a week, 50 weeks out of the year. 

As rates are based on distance, the longer your commute, the better your chance of charging $15 per ride and thus, making more money.

Below is the estimated annual fuel and car maintenance costs of a Toyota Corolla Altis 2017 from ValueChampion based on the car averaging 17,500 miles a year.

Expenditure Annual Cost for a Toyota Corolla Altis 2018
Road Tax S$742
Average Petrol Prices (1st Quarter, 2018) S$2.33
Commuting Fuel Costs (12,500km) S$1,789
Miscellaneous Fuel Costs S$715
Maintenance S$621
Total Annual Costs for Basic Car Expenses S$3,867

However, if your carpool rides only average $5 to $7 each way, you will not be able to cover all your yearly car costs as the amount raked in will be no more than $3,500 per year.

Still, it will help to take care of your fuel costs.

Get an insurance policy that covers carpooling

Not all car insurance companies cover carpooling through their regular private car insurance, so, it’s important to find out. Here are three ways to find out if your policy covers carpooling: check with your carpool app; read the wording of your policy; or call your insurer.

You must immediately switch to an insurer who covers carpooling if you are not already covered for it.

Some insurers may cover carpooling, although not if it is carried out via a commercial platform or app. So do check the terms and conditions of your own car insurance policy even if it states you are covered for carpooling. There are many different rules and regulations when it comes to car insurance and carpooling.

For instance, at Budget Direct Insurance you will be covered for carpooling if the ride has been arranged privately and not on a commercial platform such as GrabHitch, RydePOOL and GoJek.

For example; your car insurance with Budget Direct Insurance would cover you if you ferried your neighbours to their workplace, which was close to yours, and they contributed a monthly fee towards petrol.

It should be noted that Budget Direct Insurance does not cover private hire vehicles. If you drive a private hire car with say Grab for instance, then you would need a commercial car insurance policy.

Supplemental car insurance

If you are going to carpool via a carpooling app then it may be beneficial to see if there is additional insurance coverage and its terms and conditions.

For instance, you might receive free supplemental accident insurance for your passengers. This is a very convenient feature, as private car insurance usually requires you to identify other users of the car by name and may not provide medical or personal accident coverage for passengers. But be aware as some app-based insurance policies only cover the person who booked the ride. This means if your passenger wasn't the one who booked the trip, they won't be covered if you were to get into an accident. Do read the small print.

Add more passengers

Having more passengers does not necessarily result in a decrease in fuel efficiency.

Contrary to popular opinion, adding four passengers to your car every now and then will lead to a negligible increase in fuel efficiency per kilometre.

Increase your social network

Carpool apps were initially created as a social service. Drivers can view their carpooling passengers’ Facebook and passengers can select their carpool driver based on gender and pick up time and add notes about their trip.

Being a carpool driver can indeed be one way to network and spice up your daily commute.

Wherever you go, whatever you do, it’s vital to have good car, motorcycle and travel insurance cover.
Check out Budget Direct Insurance for your best deal

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