SINGAPORE: A new legislation imposing a , lock-in period , on private-hire vehicles will help stabilise source and level the playing field between ride-hailing and vehicle ships, travel experts said.
Businesses are prohibited from converting vehicles out of the Chauffeur-driven private-hire vehicle plan for three years by the plan.  , The lock-in period applies to vehicles with Certificates of Entitlement ( COEs ) issued in the latest bidding exercise, which closed on Wednesday ( Feb 19 ).  ,
The new rule ensures a steady supply of vehicles for point-to-point ( P2P ) services, and businesses that acquire such cars do so predominately to lease them to ride-hailing drivers, the Land Transport Authority ( LTA ) said.
Between January 2022 and August 2024, about 1, 500 cars a month were converted out of the hired private-hire program within their first three times, the power added.
Balance BETWEEN PRIVATE-HIRE AND Vehicle FLEETS
According to analysts, the new legislation makes it necessary for auto leasing companies to be “more measured” when expanding their fleet because they cannot rent or lease cars to people as and when they want.  ,
According to Associate Professor Raymond Ong, the plan aims to stabilize the P2P business.
” If a rental company or business private-hire automobile company buys private-hire vehicles, they are supposed to use it as a private-hire car”, said the , assistant head of research and business at the National University of Singapore’s Department of Civil and Environmental Engineering.  ,
” They ( should ) not buy the car as a private-hire car and put it to other use … it would create instability to the P2P market supply, and the fares that consumers are paying”.
For example, if need for private vehicle ownership rises, leasing firms may choose to buy private-hire cars for higher profits. The lock-in period eliminates such practices, fostering responsible buying behaviour by the firms, Assoc Prof Ong said.  ,
Theseira, an associate professor at the Singapore University of Social Sciences, noted that the move more closely complies with taxi regulations for private-hire vehicles.
Unlike taxis, where the number of vehicles is regulated and cannot be converted to private use, private-hire car numbers are not regulated and, before the move, were “freely convertible” at the company’s discretion.
This means private-hire cars have an “option value” to fleet owners that taxis do not, as they can be disposed of in the private market when prices are favourable.
” This move brings some parity to treatment, and also reduces the option value, which may discourage excessive investment in private-hire car fleets”, said Assoc Prof Theseira.  ,  ,