Entry of New Ride-hailing Operations and Impact on Private Hire Car Availability, Ride Fares and COE Prices

The supply of private hire cars and the fares for ride-hail services are driven primarily by changes in the underlying demand for point-to-point (P2P) trips. The entry of two new ride-hail service operators will offer drivers and commuters more choices of which platforms to be matched for a trip based on their preferences.

From 2022 to 2024, the bulk of the demand for Categories A and B Certificates of Entitlement (COEs) has been from local individual buyers. As highlighted previously, the COE supply for Categories A and B will continue to increase every quarter before reaching the projected peak supply from 2026.

I thank the Senior Minister of State for her reply. I have two supplementary questions. The first is, how does the Ministry balance the earnings of drivers or potential entrants and pre-existing ones, and the availability of public transport to the public? In determining the entry of new private hire operators, or ride-hail operators, is there an optimal number?

The second supplementary question, did the previous entrance of other operators over the last years cause any salient increase in COE prices?

I thank the Member for his supplementary questions. Firstly, P2P services complement the public transport sector. They provide an alternative option for commuters who do not own cars but may need access to car-like services from time to time, and commuters do choose, say, a P2P option for various reasons. But P2P is fundamentally a demand-driven transport mode and the amount of supply is ultimately based on whether there is actually sufficient demand and not just because of the number of platform operators. In fact, we have no plans to cap the number of platform operators. Fares too reflect the balance of supply and demand.

Why do I say that we do not have plans to cap the number of platform operators? Firstly, our regulations of ride-hail services seek to ensure that the P2P sector remains open and contestable. So, we require that drivers are allowed to multi-home, that they are not tied to a particular operator. As I have mentioned earlier, in the reply, the entry of two new ride-hail service operators actually means that there will be more choices for drivers and commuters, and it will benefit them. In fact, increased competition would drive innovation, as well as service improvements and help to improve the matching of demand and supply; and both commuters and drivers will benefit from this improved matching.

We also ensure that the operators are transparent about the fares and commissions, so that the drivers can make informed decisions about when to drive and what trips from which platform to accept, so that they can maximise their earnings based on the platforms they choose, as well as, of course, their driving habits or driving preferences.

As regard to the second question on COE prices, actually, there are many factors that affect COE prices, including, of course, macro-economic conditions and COE quota supply. So, based on our observations, we are not able to draw conclusions about a causal link between the entrance of new operators and impact on COE prices, simply because COE prices, as I have said, is really multi-factorial in its determination.