Priority for families with children, new ride-share car category among ideas left out of COE review

SINGAPORE – Families who feel that a car will make school runs, childcare and caregiving tasks easier revealed they wanted more help with car ownership during discussions on changes to the certificate of entitlement (COE) system.

The Land Transport Authority (LTA), in its Oct 8 consultation paper, said such concerns are understandable and families will have different transport needs at different stages of life.

The key question, however, is how to best support these families while ensuring the COE system remains fair, transparent and driven by market forces.

The LTA said: “Choosing to allocate COEs based on household circumstances requires judgment about whose needs should receive greater priority.

“Allocating more COEs for one group, such as families with young children, would necessarily mean fewer COEs for other groups, such as caregivers and multi-generational households, who may also have compelling transport needs.”

As household circumstances change over time, the LTA said it would be difficult to implement such a system fairly over the 10-year period covered by the COE.

The suggestion was among several ideas raised during discussions with more than 200 people as part of the COE review that the LTA said may not be suitable for implementation now.

Another proposal was for private-hire vehicles to be spun off into a new, separate COE category.

That could make the bidding process fairer because ride-hail operators and car-leasing companies would no longer be directly competing with private car buyers, said those who took part in the LTA engagement exercise.

The LTA said the move will mean setting aside some COEs for the new category, and prices could rise if too many COEs are reallocated from the existing pool.

On the other hand, setting aside too few would reduce the number of private-hire vehicles on roads, leading to higher rental fees for drivers and more expensive fares for travellers.

Since private-hire vehicles can be used for personal transport, new rules would be needed to ensure they are used only for their intended purpose.

There were also calls to impose a surcharge on people owning more than one car and discourage the ownership of multiple cars, thus making more COEs available for first-time or single-car owners.

The LTA said such a move is unlikely to have a significant impact on COE prices because people with more than one car are not the key drivers of COE demand.

Also, fewer households own multiple cars now. The LTA said in 2025 that there were about 66,000 such households, representing about 13 per cent of all households that own cars.

In 2012, there were about 87,000 multi-car households, making up nearly a fifth of all households that own cars.

As for imposing a surcharge, the LTA said it will be “difficult to administer fairly or effectively”, because different households have different transport needs.

There were also suggestions to make changes to the bidding process, including allowing only prospective car owners to bid for COEs, instead of letting car dealers do it.

The LTA said it is looking at ways to encourage buyers to submit COE bids on their own. It added that buyers can already submit bids now using DBS Bank or POSB automated teller machines.

It said it is reviewing suggestions to get car dealers to be more transparent, such as publishing car prices without adding COE prices to the total cost.

Another suggestion to revise the COE system was to change the practice of making all successful bidders pay the same price, based on adding $1 to the highest unsuccessful bid.

Instead, each successful bidder could pay only the amount submitted.

The LTA said such a change is unlikely to lower COE prices because private buyers can observe the prevailing price and adjust their bids, and those more willing to pay will generally be the ones obtaining a certificate.

Aqil Hamzah is a transport journalist at The Straits Times. He is also interested in issues related to crime and technology.