Government says no to separate COE category for private-hire cars

The government introduced regulatory changes for taxis and PHC.

The government will not create a separate Certificate of Entitlement (COE) category for business-owned private-hire cars (PHCs).

“We have studied this carefully and decided not to proceed with such a move,” Senior Minister of State for Transport Dr Amy Khor said at the MOT Committee of Supply Debate 2025.

Khor said that most of the demand for Cat A and B COEs has been from local individuals, not PHC or car leasing companies. Khor cited that in the most recent bidding in February 2025, business-owned PHCs made up 6% and 8% of successful Cat A and B bids, respectively.

Khor also said that quota from existing categories, such as Cat A and B, would need to be taken away to provide the quota for the new separate category.

“We have seen that demand for PHCs varies from quarter to quarter, given that fares and driver supply are highly responsive to commuter demand. It is very difficult to accurately determine the COE quota supply for PHCs that is required to meet the needs of drivers and commuters,” Khor said.

The minister also said that moving too much quota away will increase prices for Cat A and B because of the inadequate remaining quota. On the other hand, moving to little will, COE prices for PHCs will be high, with drivers and commuters facing higher rental and fares.  

Instead, the government intend to strengthen regulatory regimes for taxis and PHCs. After suspending the growth cap on the taxi fleet, the government plans to allow taxi operators to convert used vehicles that are less than five years old to taxis. Instead of just buying new vehicles, taxi operators will have an additional option to grow their fleet, which may help reduce costs.

It will also allow taxi operators to resell taxis that are more than three years old, capped at 5% of their fleet annually. This will give taxi operators flexibility to resell under-utilised taxis and reduce carrying costs. Khor said this added flexibility can also reduce operators’ risks when trialling new taxi models, such as bigger, more expensive multi-purpose vehicles which can better serve larger families.

“These moves give taxi operators more flexibility to manage cost and grow their fleet. They complement our moves in the PHC sector to further level the playing field between taxis and PHCs,” Khor said.