Impact of Private-hire Car Companies' Demands on COE Premiums

Miss Cheng Li Hui asked the Minister for Transport (a) how much has the aggressive bidding for COEs by private-hire car companies, such as Uber and Grab, affected demand and contributed to COE premium increases; (b) what is the reason for LTA's recent block of free access to bidders' information; and (c) whether the Ministry will consider creating a separate COE category for private-hire vehicles.

Since March this year, there has been an increase in the number of certificate of entitlement (COE) bids submitted by car rental companies, including those associated with private hire car services.

Notwithstanding this, if we ignore the one-off increase in COE premiums after the loan regulations were eased in May this year, the market has remained relatively stable. Category A and B COE premiums fluctuated only within a narrow band of $3,000 over this period. This is because it is not the number of bids per se, but how aggressively these bids are priced, that drives COE premiums up. So far, car rental companies do not seem to have been bidding very aggressively.

The bid enquiry function on the Land Transport Authority's (LTA's) online COE bidding system is meant for bidders to access information on their own bids. It was never meant to be a means for people to pry into the bids of others. In response to feedback to better protect bidders' privacy, LTA now requires company bidders to enter an acknowledgement code that is known only to them, after which they can access their own bidding information.

Currently, privately-owned cars can be converted into private hire cars and vice versa, unlike taxis. If we create a separate COE category for private hire cars, we may have to disallow such conversion. This will limit the flexibility of the private hire car market to the detriment of commuters and private hire car service providers. On the other hand, if we allow such conversion flexibility, it may lead to gaming and distortion of the COE market. LTA will continue to monitor the COE market and look further into this issue as needed.