How Private Hire Cars Affect COE Prices
The rise of private hire vehicles (PHVs) — primarily through platforms like Grab and Gojek — has introduced a powerful new demand force into Singapore's COE market. With an estimated fleet of 50,000-60,000 active PHVs as of early 2026, this sector consumes a meaningful share of COE certificates and influences the supply-demand balance in ways that are sometimes underappreciated.
The PHV Fleet in Numbers
| Metric | Estimate (Early 2026) |
|---|---|
| Active PHV fleet size | 50,000-60,000 |
| Share of total car population | ~7-8% |
| Annual PHV registrations | ~8,000-10,000 |
| Share of annual car registrations | ~12-15% |
The key insight is that PHVs account for a disproportionate share of new registrations relative to their share of the total fleet. This is because PHVs have shorter ownership cycles — many are operated for 3-5 years before being replaced — resulting in higher turnover and more frequent COE demand.
How PHVs Affect COE Demand
PHV demand for COE is driven by fleet operators (companies like Grab, ComfortDelGro, and third-party fleet operators) and individual owner-drivers. Fleet operators typically purchase vehicles in bulk at regular intervals, creating concentrated demand spikes in specific bidding exercises. This bulk purchasing behaviour can temporarily inflate premiums in the rounds where fleet orders are placed.
Most PHVs are Category A vehicles — compact, fuel-efficient models that minimise operating costs per km. This concentration of demand in Category A adds upward pressure specifically to the mass-market segment, making it more expensive for private buyers competing for the same certificates.
The Deregistration Effect
There is a silver lining: PHVs also generate deregistrations. Because they are driven significantly more than private cars (typically 80,000-120,000 km per year versus 15,000-18,000 km for private vehicles), PHVs reach end-of-life sooner. Many are deregistered after just 5-7 years, well before the 10-year COE expiry. These early deregistrations feed back into the quota formula, adding future supply.
However, the net effect on supply is still negative in a growing PHV market. As long as the fleet is expanding — with more PHVs being registered than deregistered each year — the sector is a net consumer of COE certificates.
Policy Considerations
The government has taken steps to manage PHV demand in the COE system:
- PHV driver licence requirements: Requiring a Private Hire Car Driver Vocational Licence limits the pool of drivers and, indirectly, vehicle demand.
- Fleet size caps: There have been discussions about capping the total PHV fleet size, though no formal cap has been implemented.
- LTA data sharing: PHV operators must register their vehicles with LTA, providing transparency on fleet sizes.
Impact on Individual Buyers
For private buyers in Category A, the PHV sector represents a structural demand competitor that was absent a decade ago. An estimated 12-15% of Category A demand now comes from PHV purchases, which adds roughly $3,000-$5,000 to equilibrium premiums compared to a hypothetical market without PHV demand.
There is no straightforward solution for private buyers beyond being aware of this dynamic. Some buyers time their bids to avoid rounds where fleet operators are known to be purchasing, though this information is not publicly available and relies on dealer intelligence.
Frequently Asked Questions
Are PHV operators exempt from COE bidding?No. PHV operators must bid for COE certificates through the same system as all other buyers. There is no special allocation or discounted rate for commercial operators. This means PHV demand competes directly with private buyer demand in the same bidding exercises.
Do PHVs drive up COE more than taxis did?The PHV fleet is significantly larger than the traditional taxi fleet ever was (approximately 60,000 PHVs versus a peak of approximately 28,000 taxis). Additionally, taxis had a dedicated COE quota mechanism under the old system, while PHVs compete in the general Category A pool. The net demand impact of PHVs on Category A is therefore greater than taxis historically exerted.
Would a PHV-specific COE category help?A dedicated PHV category could reduce pressure on Category A premiums for private buyers. However, it would create a new market whose pricing dynamics are hard to predict. If the PHV quota is set too low, PHV operators face prohibitively expensive COEs, potentially reducing ride-hailing supply and raising fares for consumers. This trade-off makes a PHV-specific category politically complex.