Saturday, July 28, 2012

Category T (Taxi) COEs

Today is the start of the London 2012 Games and it reminded me about the Olympics Lane we had two years ago when the YOG was held here.  Designating lane for the Game does ease anticipated congestion for the athletes and officials but it causes horrendous commuting for the locals.

LTA has also published earlier today updates for Taxi COEs:

Taxi-related COE Changes

  • As we move towards a lower vehicle growth rate, LTA will also make changes to how taxis obtain their COEs, taking into consideration recent COE trends and feedback from both the public and the motor industry about the influence that taxi operators may have on COE prices. First, taxis will be taken out of the COE bidding process from August 2012. They will pay for COEs based on the Prevailing Quota Premium (PQP) of CAT A under the Vehicle Quota System (VQS). This is irrespective of whether the new taxis are intended to replace deregistered taxis or to add to the existing fleets. Allowing taxis to pay the CAT A PQP maintains a concession given to taxis for their public transport role.
  • Second, the COEs used for taxi fleet expansion will be extracted from the Open Category (CAT E), which can be used to register vehicles in any COE category. This is more reflective of the role of taxis in our public transport system and it is more equitable to use CAT E quotas that are contributed by all vehicle types, rather than drawing solely from CAT A quotas. This also reflects the current situation in which taxi companies register a variety of vehicles as taxis, including both CAT A and CAT B models as well as some minibus models.
  • LTA is in discussion with the taxi operators on the proposed taxi availability standards and COE related changes. LTA will finalise the details and provide information on the COE related changes in early August, before the start of the next COE bidding cycle. It will provide details on the taxi availability standards in the fourth quarter of 2012.
  • The COE quotas already announced for the next 6 months (August 2012 to January 2013) will not be affected.

With this latest change, the buck is passed to Category E which is usually used to register larger private cars.  The obvious effect is that the Category B COE quota premium will eventually move up in tandem with the reduced Category E COE quota from 2013.  Category A COE quota premium should fall without the competition from the taxi companies evident from late bids submitted in several of the past month's bidding exercise. 

I wonder if the noise source will shift to larger car buyers.  In the same press release, LTA will require taxi companies to comply to the new Taxi Availability (TA) standards from 2013 which may require them to put more taxis on the road.  I am sure that the analysis of the impact will be conducted soon and the gap will force the increase their fleet size and consumed the Category E COEs.  My bet is that Category E COE quota premium will hit $100K soon.

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