A peer-to-peer car-sharing service will go on a trial in South Korea as the government has given the green light to a startup under the ‘regulatory sandbox’ program that allows firms to test their new services or products currently banned under the existing rules.

The Ministry of Science and ICT and the Korea Chamber of Commerce & Industry (Kocham) okayed the business idea from startup Towns enabling car owners to share their idled vehicles to neighbors living in the same apartment complex.

The company can operate the service for the next two years on a trial basis and extend the period by two more years if necessary. Official launch is possible if related laws and regulations are revised after the trial service.

Under the current passenger transport act, car rental companies must have a fleet of more than 50 vehicles to register their business. The ministry and Kocham’s review committee said it is a good opportunity to test the validity and feasibility of small-scale car rental business that could improve mobility of people in regions lacking public transportation and solve traffic and parking problems.

Towns plans to operate the service in Hanam, Gyeonggi Province, with 500 or more private car owners. Peer-to-peer car-sharing service is already active in many countries around the world.

Towns CEO Choi Yoon-jin said its service is certainly a pinnacle of the sharing economy business model as it allows people to share their idle cars with neighbors. “The platform enhances mobility of people, relieve the shortage of parking spaces and allow hosts to earn extra money, resulting in ‘killing three birds with one stone’ effect,” said Choi.

Towns is set to bag investments worth billions of won from venture capital firms.

By Song Gwang-sup, Lee Seung-yoon and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]