Segregating COE Bidding for Different Categories of Car Buyers
Ministry of TransportSpeakers
Summary
This question concerns the potential segregation of the Certificate of Entitlement (COE) bidding process between private hire car companies, taxi operators, and individual buyers to prevent market distortion. Mr Zaqy Mohamad and Mr Lim Biow Chuan asked about limiting company bids and decoupling COE pricing from vehicle purchases. Minister for Transport Khaw Boon Wan responded that while taxi operators draw from Category E at Category A prices, the government is currently monitoring the private hire car sector to determine if similar measures are appropriate. He clarified that segregating individual and proxy dealer bids is unnecessary as they reflect the same underlying demand and would create an artificial, distortionary picture. Regarding car sales, the Minister maintained that the market should decide whether COEs are packaged with vehicle purchases, noting that dealers can provide separate pricing upon request.
Transcript
37 Mr Zaqy Mohamad asked the Minister for Transport (a) whether LTA will consider limiting the categories that private hire cars and taxi companies can bid for COEs as against individual car owners; (b) whether LTA will consider segregating COE bidding between individual owners and companies, including car dealers on behalf of individual buyers; and (c) whether LTA has studied the impact of separating COE pricing from new car purchases.
38 Mr Lim Biow Chuan asked the Minister for Transport whether the Ministry will take out private hire car firms like Uber and Grab Taxi from the COE bidding process and treat them similar to taxi operators so that the COE system is not distorted by their bids for COEs.
Mr Khaw Boon Wan: Today, taxi operators do not bid at COE auctions. They draw their COEs from Cat E and pay the Cat A Prevailing Quota Premium. In this way, the impact of the growth and replacement of the taxi fleet, which can be lumpy, is isolated to Cat E.
As for the private hire car sector, we will continue to monitor its rate of growth and uptake of COEs, to see if a similar measure will be appropriate.
There is nothing that prevents individuals from bidding for COEs on their own. However, most choose to have dealers bid on their behalf, for convenience and also because of the way some dealers package the prices of the cars. We have no plans to segregate individual and proxy bids since, ultimately, both emanate from the same demand. Segregating them will be artificial and give a distortionary picture.
Buying a car is a transaction between a willing seller and a willing buyer. Most car dealers will offer prices without COEs, if asked. It is best that we leave it to the market to decide how car sales should be carried out, whether with the COEs packaged or not.