THE number of private-hire cars has increased by 11.3 per cent over the last 12 months to 76,686 in June, as operators grew their fleets to meet rising demand for ride-hailing services from returning tourists.

High certificate of entitlement (COE) prices, which push up the cost of cars, have driven some consumers to turn to renting and ride hailing as well, observers said.

The private-hire car population as at end-June was just 455 units shy of the peak in 2019, when there were 77,141 cars for self-drive rental and ride hailing. The number of such cars dropped between 2020 and 2021 with the onset of the Covid-19 pandemic, but started recovering in 2022.

Singapore University of Social Sciences associate professor of economics Walter Theseira said: “The private-hire car population had shrunk due to lack of demand during Covid-19, and the surge in demand after the pandemic has caught the players by surprise. So the fleets are slowly rebounding.”

Goldbell Corporation board adviser Ng Lee Kwang, who also teaches transport topics at the Singapore Institute of Management, said the return of tourism has created a lot more demand for ride-hailing services. He expects demand to continue to grow, pointing out that tourist numbers from China have yet to recover to pre-pandemic levels.

But he said this does not mean that the population of private-hire cars will continue growing, as current COE premiums may be too high for fleet operators to be able to rent out their cars profitably.

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In contrast, Nicholas Wong, general manager of Honda agent Kah Motor, expects there will be even more private-hire cars to come, as there is still “plenty of latent demand” from car-sharing operators competing for market dominance.

He cited a September 2022 report about car-sharing company BlueSG planning to add up to 500 new Opel Corsa-e hatchbacks to its fleet. This model is currently used only by BlueSG and not sold to private individuals.

Based on vehicle population data, there were 73 Opel electric cars as at end-2022. In the first six months of 2023, there were 90 registrations of electric hatchbacks from the German brand.

Car-sharing outfit GetGo continues to expand as well. In February, the company raised S$20 million to grow its fleet, which currently stands at more than 2,100 cars. GetGo targets to have 10,000 “greener vehicles” by 2030.

The rebound in the number of private-hire cars comes at a time when there are fewer COEs to register vehicles.

In total, there were 13,002 COEs used to register cars in the first six months of 2023, down 20.9 per cent from 16,440 in the same period in 2022.

In comparison, the number of new private-hire car registrations fell 14.8 per cent, from 4,337 to 3,693 units, which means that more of the pool of COEs available for bidding in 2023 were used to register private-hire cars.

In the first half of 2023, 28 per cent of car COEs available for bidding was used to register private-hire cars, up from 26.38 per cent for the same period in 2022.

Industry insiders said an area of concern is that a private-hire car can be converted to a normal private car without restraint, which means fleet owners can simply sell their private-hire cars if there are no hirers. It is not unheard of for heavily used private-hire cars to be spruced up and passed on to unsuspecting private car buyers, they said.

For S$100, existing private cars can be converted to a private-hire car and vice versa. The conversion out of the private-hire car scheme is automated when the vehicle is transferred to a car dealer.

Motor traders have lamented that the expansion of private-hire fleets amid tight COE supply has driven up premiums. Some feel that such cars should be removed from the bidding process quota, like taxis.

Since 2012, taxi operators do not bid for COEs. They pay the premium determined by the COE tender exercise, and the number of COEs available to them is tied to taxi availability standards instead. This means taxi companies do not exert pressure on COE premiums when they need to expand their fleet.

In comparison to the growth of private-hire cars, the taxi population has been shrinking from its peak in 2014, when there were 28,259 units.

As at June 2023, there are 13,861 taxis in Singapore. This is down 3.47 per cent from a year ago, and sets the sector back to 1993 levels when there were 13,917 taxis in the Republic.

Asked what a larger private-hire car population would mean for fares, Theseira said the crux is not the registered population of cars but the number of drivers who are actually on the road, particularly during peak periods.

“You can have more cars, but if there aren’t drivers willing to use them for hire, you don’t get more actual supply.” THE STRAITS TIMES