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A NEW rule on private-hire car (PHC) ownership could moderate demand for Certificates of Entitlement (COEs), by making major PHC fleets more circumspect in bidding and reducing speculation by smaller players.

The new rule, which took effect on Wednesday (Feb 19), imposes a three-year lock-in period for PHCs newly acquired by businesses. In this time, these vehicles cannot be converted to regular passenger cars, nor sold to individuals.

This ensures that businesses which acquire PHCs do so “predominantly for the purpose of leasing them to drivers providing ride-hail services”, the Land Transport Authority (LTA) said.

It also “prevents the premature conversion of such PHCs out of the chauffeured PHC scheme, which will affect the supply of vehicles available for point-to-point services”.

While LTA did not mention COE premiums, observers said that the move would change how companies bid for the certificates.