Creating new COE category for private-hire cars will drive up costs for consumers: Transport Ministry

Creating new COE category for private-hire cars will drive up costs for consumers: Transport Ministry

Doctor Khor was responding to a question by MP Louis Chua (WP-Sengkang), who asked  whether car rental companies, particularly those leasing to PHC companies, have got affected COE bid prices in the past year.

The COE premium to get larger cars within Category B hit a second consecutive record in the latest putting in a bid exercise on Sep 7, as prices closed higher for most categories.

COE premiums have been on the mostly upward trend and broken record highs in the past few months, with observers attributing this to a lack of COE supply.

Some netizens have blamed the eye-watering prices on PHC and rental companies, arguing that they should be removed from the particular COE bidding procedure, similar to taxi providers. PHC and leasing companies earlier told CNA they failed to bid aggressively intended for COEs and were not responsible for the rise in premiums.

Doctor Khor said on Tuesday that “there is no evidence” PHC companies caused the increase in COE bid prices.

“LTA (Land Transport Authority) has been monitoring the market closely and over the past year. The demand for COEs through PHC companies as well as the overall PHC inhabitants have been stable, inch she said.

Since 2012, taxi operators do not have to bet for a COE to join up their taxis. Instead, they draw through the pool of Type E (Open) COEs and pay the Category A COE prevailing quota premium.

Taxi availability standards were also introduced, and taxi operators can grow their fleets simply by up to 2 percent per annum, subject to meeting the standards, Dr Khor said.

“Unlike taxis, PHCs are essentially for yourself owned cars which have the flexibility and autonomy to take passengers, thereby augmenting our availability of shared point-to-point automobiles, ” she additional.

“Hence, PHCs are treated such as privately owned cars under the vehicle dole system. ”

Dr Khor stated the call to review COE categories is a “perennial suggestion”, highlighting that there will be trade-offs between  having specific types to meet specific requirements and ensuring sufficient COE quota for all those categories.

“The fact is that it is going to lead to further fragmentation and volatility, particularly when COE supply is definitely low, ” the lady said.

“So, if you’re looking at COE premiums and so on, fundamentally it’s fundamentally requirement and supply for vehicles that determines COE premiums. ”

Dr Khor additional that LTA may continue to monitor the particular point-to-point sector and study schemes for further enhancement.