Just over three years ago, the Transport Ministry removed taxis from the certificate of entitlement (COE) bidding process to take some heat off car bidders.
Now, three years after third-party taxi app provider Uber arrived, the heat is back on.
During last week's COE tender, Uber-owned Lion City Rental submitted more than 800 bids, which accounted for 11 per cent of the total bids made for car COEs.
According to market talk, Lion City is looking to put 1,800 new cars on the road in anticipation of growing demand.
Rival company Grab is also expected to do the same.
The two already have between them some 10,000 cars - mostly old vehicles.
But in recent months, both have started sourcing for new vehicles, and are jostling with private car owners for fresh COEs.
Now, with the Government announcing "light touch" regulations governing third-party taxi apps, the proliferation of private-hire vehicles will accelerate.
Most of the taxi companies are also starting up private-hire subsidiaries to compete with Uber, Grab and other small players like Smove and Tribecar.
This will only intensify the competition for COEs, which explains why car premiums have not fallen in tandem with the growth in supply.
If the demand for private-hire services continues to grow, taxi operators are likely to shrink their cab fleets and switch. Again, this will fuel demand for COEs.
Most private-hire cars are smaller vehicles, so the pressure will be greater on COE Category A bidders (cars up to 1,600cc and 130bhp).
But some are gunning for Open Category too, such as Lion City.
At the last tender, more than 200 of the company's Open bids were disqualified because they had identical values, which sources said was a move to manipulate the market.
The Land Transport Authority said: "As there were more than 237 bids with the same next lower bid amount, awarding the COE to all these bids would exceed the quota. The 237 unallocated COEs will be carried over to the first open bidding exercise in May 2016."
Uber was not reachable for comment.
Car-Sharing Association (Singapore) president Lai Meng said: "The fast growth in the private-hire car services like Uber and Grab is a validation of the sharing economy."
Christopher Tan
[On the one hand, not to over-regulate. On the other hand, loopholes exploited.
What does this means for the future?
One, no more "light touch"? Uber et al to be treated as Taxis?
Two, further tweaking of the COE scheme? New Categories based on usage, perhaps?
Three, Clampdown on loopholes for car purchases like below?
Two, further tweaking of the COE scheme? New Categories based on usage, perhaps?
Three, Clampdown on loopholes for car purchases like below?
Uber helps car buyers overcome loan limits
MAR 30, 2016,
Ads promote bold financing scheme that promises loan of up to 80 per cent of car price
Christopher Tan
Senior Transport Correspondent
It has been doing so implicitly for the past year. Now, Uber is making it quite explicit that it is targeting people who want to own a car but cannot afford the 40 per cent to 50 per cent down payment required by law.
In press advertisements yesterday, the San Francisco-based transport app provider marked its third anniversary in Singapore by launching a bold car-financing scheme that seems at first glance to flout regulations introduced by the Monetary Authority of Singapore (MAS) three years ago. It says Uber consumers can secure loans of up to 80 per cent of the car's price, claiming: "Your dream car is now within reach!"
Uber, which is no stranger to controversy the world over, said the deal does not break any law in Singapore. It stated that cars must be registered under a company name, and under a scheme that allows them to be used for offering paid rides - even if not with Uber. "The government scheme applies to personal cars only," Uber Singapore general manager Warren Tseng said.
MAS concurred: "MAS' motor vehicle financing restrictions do not apply to loans for the purchase of private-hire cars. Drivers should be aware that they will incur additional costs, including higher insurance premiums, should they enter into such arrangements."
Mr Tseng claimed, however, that Uber has "negotiated deals with insurance partners which can offer premiums at as low as $1,300 (per year) for a comprehensive insurance package which covers personal and private-hire use".
The Uber ad which offers a bold car-financing scheme that says consumers can secure loans of up to 80 per cent of the car's price. The firm stated that cars must be registered under a company name, and under a scheme that allows them to be used for offering paid rides - even if not with Uber.
Industry sources said premiums for private-hire cars are typically three to five times that of those for normal private cars.
Checks by The Straits Times also revealed higher interest charges. For instance, Fu Yiap Motor Trading, one of several used car dealers Uber has paired with for this deal, quoted interest rates of between 2.98 and 3.25 per cent - more than one percentage point higher than what leading lenders are quoting.
A customer borrowing $60,000 over five years would end up paying some $4,000 more.
While the deal is not tied to any obligation to drive for Uber, Mr Tseng said the scheme "gives people a way to afford a car... earning money in their spare time and also helping to cover car costs".
Industry watchers are not impressed. Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "It is no big deal. Uber is merely a match-maker, bringing customers to these car dealers. Of course it hopes that these people will end up doing Uber rides."
Additional reporting by Toh Yong Chuan
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