Letter
Re-assessing COE categories: The impact of private-hire operators on premiums
Letter: It is likely that private-hire car operators, possessing both significant financial and monopolistic power, have substantially driven up Certificate-of-Entitlement (COE) premiums. This has had a notable impact on private-car owners. Foong Swee Fong suggests that it’s time to reconsider their classification within the COE system.”
The Straits Times Senior Transport Correspondent, Christopher Tan, pointed out that private-hire car population has increased 500% since their arrival ten years ago. In contrast, the private-car population has inched up by a mere 6.4%.
It is, therefore, true to say that private-hire car operators are major contributors to the sky-high Certificate-of-Entitlement (COE) premiums.
These operators have the financial muscle to bid high to secure COEs, and having secured them, can pass the cost to the hirers.
They also have an incentive to keep COE premium high as a sharp drop would result in them sitting on negative equity, given their huge holding of cars.
Also, a sky-high COE premium would drive private-car owners to give up their cars and take private-hire rides.
As perverse as it sounds, it makes business sense to keep COE premium high, albeit short-term thinking.
Indeed, the few big private-hire players – GRAB, Delgro, Gojek (Temasek linked?) – not only have the financial but monopolistic power, to influence the COE premium.
The original COE system did not conflate premium for private vehicle with premium for commercial vehicle. Thus there is a Commercial Vehicle COE category.
When taxi companies bidding for COEs in Category A chased up the premium back in 2012, they were taken out of the bidding process and instead paid the Prevailing Quota Premium (PQP).
In this way, commercial interest did not push up premiums for private vehicle owners. (Although I think it is still wrong as it is a loophole around the current 0% vehicle growth policy.)
Private-hire cars are commercial vehicles, period. They, as well as taxis, should be lumped with other commercial vehicles in the Commercial Vehicle COE category to reflect the true cost of doing business, and not “free-riding” in the private-car categories.
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Great article which SG Gov turns blind eye as they are directly benefiting from it as they majority players in private hire companies are theirs and pushing green and car free society….the citizens are taking the toll and they are been taken as mediocre citizens.
When will the government opens there eyes and keep there citizens first? Is it only near to the elections?
PHV represents people who choose to share limited resources and therefore high prices. It’s not their fault, the Government has to level the playing field by making sure there is a competitive environment to prevent price gouging. All car-related taxes ( COE road taxes etc…) should be ringfenced to fund public transport infrastructure and reduce costs to public transport commuters and not go into the reserves. Sending car-related taxes into the reserves is an unfair taxation on the residents to fund future generation’s needs is just fundamentally wrong.
There is no denying LTA know who these high bidders are. But when the Transport Ministry does not want to make any changes, why would the people running LTA stick their neck out? Like the saying, it’s okay to be smart but don’t act too smart. Iswaran himself acknowledged he knows how motorcycle traders bid for COE but chose to do nothing, not until motorcycle COE shot through the roof. Motorcyclists were surprised when LTA suddenly changed the rules for motorcycle COE bidding not too recently. Perhaps now that Iswaran fate is uncertain, nobody in LTA is going to be… Read more »
Like housing prices in Singapore everything is driven up by those with more money than others. This trend will soon price out ordinary people out of the market
Why bother, … seriously !!!
Moans and groans, … on account of it breaking records every now and then.
If it maintains itself, if it can, … just below record levels, everyone will continue to buy that “piece of paper” and accept it as a part and way of SillyPore life, … like affordable public housing and that the future generations of SillyPoreans have a lot to look forward to !!!
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https://t.me/c/1776965825/2511
86% and you wanna talk about COE?
its stupid and senselss to lump everything under one category… Recently private hire car comanies are driving up the prices. In the end cars are affordable to only big corporations and businesses
What about the needy or handicapped that require regular mode of private transport for medical reasons?