Separate COE category for private hire cars 'not a straightforward exercise': Chee Hong Tat

Minister for Transport Chee Hong Tat explained that having a separate Certificate of Entitlement (COE) category for private hire cars is "not a straightforward exercise."

"Demand for COE from car leasing companies can vary quite a bit from quarter to quarter and from year to year. It is difficult to ascertain upfront the quota required to meet the needs of point-to-point drivers and commuters," Chee explained in parliament on Nov. 12.

This was in response to numerous questions by Members of Parliament (MPs) regarding the injection of COEs from February 2025.

Specifically, nominated MP See Jinli Jean asked whether the Ministry could conduct a study on how the increase in the number of COEs will impact the point-to-point transport sector in terms of the number of taxis and private-hire vehicles.

The data

Chee pointed out that the average COE price over the past three months and the price that vehicle owners pay to renew their COEs have fallen across all vehicle categories by about four per cent to 21 per cent over the past year.

Then, looking at successful Cat A and B bids from 2022 to October 2024, Singapore residents account for the most successful bids, increasing from 66 per cent in 2022 to 84 per cent in 2024.

However, the proportion won by car leasing companies, which bid for vehicles that are then leased out as PHCs, decreased from 26 per cent in 2022 to about 10 per cent in 2024.

Chee explained that the data shows that the main drivers of the increase in COE prices in recent quarters are likely due to strong demand from local individual buyers, not from foreigners or car leasing companies.

In addition, the decrease in the proportion of bids won by car leasing companies shows why the suggestion of having a separate COE category and moving existing quota from Cat A and B into that separate category was "not a straightforward exercise".

Chee reiterated that moving too much of the existing quota from Cat A and B into a new category for PHCs would reduce the supply in Cat A and B to the demand for non-PHV buyers and could increase COE prices in those categories.

On the other hand, underestimating the quota for PHCs could lead to insufficient PHC supply, which could increase PHC prices and reduce customer accessibility.

"These are the difficult trade-offs, and it is not a straightforward exercise," Chee said.

Top photos via Unsplash & MDDI/YouTube