COE system seems to have been wrongly applied to taxi fleets and it may be costing commuters and taxi drivers dearly.
Started as a measure to limit the number of new vehicles on public roads by charging exorbitantly high fees for every new vehicle registration, the current COE system that is applied to taxis today became somewhat redundant years ago, after the taxi licensing regime was tightened and private taxi ownership was outlawed. Today, taxi drivers are required to rent taxicabs from licensed taxi operators like Comfort Delgro.
Since then, the growth of taxi population has been limited by LTA regulations, which limit the number of taxis that a taxi operator licensee (like Comfort) can operate. COEs thus serve no practical purpose when it comes to controlling the taxi population growth, since LTA already controls the taxi population through taxi operator licenses.
Today and you find taxi passengers paying high prices not just because taxi drivers need to earn more, but also because taxi companies need to cover the cost of the vehicle, which includes the COE.
The high costs eat into the earnings of taxi drivers as they pay more than $100 in rental every single day.
Imagine if COEs were not applied to taxis - the cost of taxi vehicles could be significantly decreased and both passenger and taxi driver would benefit!
Taxi fares have increased, and you may wonder why the Public Transport Council has not stepped in.
This might surprise you, but the Council has no authority to control taxi fares. This is because LTA deregulated taxi fares in 1998, allowing taxi operator licensees the freedom to raise fares as they saw fit. Yes, public taxi services does not fall under the Public Transport Council. They can only sit and watch taxi fares rise.
Taxi companies claimed that fare hikes were necessary to manage demand for taxi services. But economics has two parts - demand and supply. So rather than increasing supply by expanding capacity or raising efficiency, they raise prices to reduce demand.
Obviously there must be a better way to reduce taxi fares and increase the earnings of our Singaporean taxi drivers.
What I propose is to stop charging COE fees for taxis, and re-regulating taxi fares through the Public Transport Council. That would be a start.
The Council can then decide how many taxis to allow on the roads, how much they should charge, and of course, how taxi companies can be better regulated.
But at this stage, it looks to be wishful thinking, and we are set for skyrocketing taxi fares that will push more people into crowded trains and buses.
SG Common
TRS Contributor