Uber single-handedly driving up COE prices in Singapore

Photo credit: Digital Trends

Via The Straits Times:

Certificate of entitlement (COE) premiums for cars dipped at the latest tender yesterday. But they would have fallen more dramatically if not for strong bidding from Uber.

Motor traders pointed out that the Uber-owned Lion City Rental submitted 870 bids in all three COE categories, and was successful for all but 30 of them.

Together with the bids it submitted in two previous tenders, Lion City has secured about 1,700 car COEs – all within just two months of bidding.

It seems Uber believes that more drivers are about to join its network, if strong COE bids from the company can be taken as an indicator. COEs are essentially certificates that car owners must purchase to drive on the road, and they often cost more than the cars themselves.

What’s significant here is that one company alone can drive up prices for a national bidding system. This could be a sign that Uber is still growing in Singapore, or that it is intending to spend more on marketing in the hopes of attracting drivers.

Another point of note: Uber’s network also consists of car owners who pick up passengers just so they can make extra money to offset their car loans. If there are a significant number of such drivers, it means Uber could be causing rising demand for COEs from private car owners. That isn’t data that can be captured as easily.