SINGAPORE: The Land Transport Authority (LTA) rule requiring Singapore business-owned private hire cars to maintain their use for three years is expected to “level the playing field” by reducing their advantage over taxis, which have faced stricter regulations for years, analysts said.
In a Zoom interview with Singapore Business Review, Walter Edgar Theseira, an associate professor at the Singapore University of Social Sciences, said taxis were previously restricted to taxi use only, making them a riskier investment, while private hire cars used for ride-hailing services like Grab or rental services like Lion City Rentals could be repurposed more freely.
Mr Theseira said this contributed to the decline of taxis from nearly 29,000 in 2014 to just over 13,100 in 2024, while the number of chauffeured private hire cars surged 38 times to 59,371, according to LTA data.
LTA data from early February also showed that fewer and fewer taxi rides are being hailed on Singapore’s streets, partly due to fewer taxicabs.
Since Feb 19, the new rule has locked business-owned private hire cars into their intended use for three years. If transferred to another business, the lock-in period remains. However, it will not apply to individuals using their cars for ride-hailing or personal use.
Mr Theseira added that besides “levelling the playing field,” the three-year lock-in period would also help curb speculative activity in the private hire car market.
Assistant Professor Lee Kwok Hao of the National University of Singapore Business School told Singapore Business Review via Zoom that there had been complaints about private hire cars being turned into regular passenger vehicles or sold early for speculative reasons.
He added that this rapid convergence may have disrupted the balance between taxis and ride-hailing services. Mr Lee said fewer car rental companies are likely to bid for private hire car permits due to the lock-in period.
Transport Minister Chee Hong Tat revealed that rental companies accounted for 10% of private hire car permits issued from January to October 2024.
With the lock-in period in place, fleet operators would have to consider demand more carefully before bidding for certificates of entitlement, Mr Theseira added. /TISG
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