Starting February 19, 2025, new business-owned private-hire cars in Singapore will be subject to a mandatory three-year lock-in period before they can be transferred to individuals. This move, announced by the Land Transport Authority (LTA), aims to ensure the stability of vehicles available for ride-hailing services under the chauffeured private-hire car (PHC) scheme.
The regulation applies to all newly registered or converted business-owned PHCs, as well as those transferred from individuals to businesses. Here’s everything you need to know about this policy change and how it impacts the ride-hailing industry in Singapore.
Three-Year Lock-In Period for Business-Owned Private-Hire Cars
Under the new rule, businesses acquiring private-hire cars must retain them for three years before they can be transferred to individuals. The policy is designed to prevent premature conversions that could disrupt the supply of vehicles for ride-hailing services.
This restriction will apply to:
- All new business-owned private-hire cars registered from February 19, 2025.
- Vehicles converted into the PHC scheme under business ownership.
- Business-owned PHCs transferred from individuals.
However, business-owned PHCs with an existing lock-in period can still be transferred to another business, carrying over the remaining lock-in duration.
Reason Behind the New LTA Regulation
The introduction of this lock-in period is part of an ongoing Point-to-Point (P2P) industry review that began in 2023. According to Senior Minister of State for Transport Amy Khor, the new regulation aims to stabilize the PHC supply for ride-hailing services.
Currently, PHCs can be freely converted in and out of the PHC scheme, leading to fluctuations in vehicle availability. In contrast, taxis cannot be easily converted, making their supply more stable. The new rule seeks to bring more consistency to the PHC fleet to better meet ride-hailing demand.
Premature Policy Announcement Due to System Error
Originally, LTA planned to announce the rule after the ongoing Certificate of Entitlement (COE) bidding exercise, which closes on February 19. However, a technical deployment error by LTA’s vendor, NCS, led to an unintended early release of the information on February 16.
To ensure fairness and transparency, LTA decided to bring forward the official announcement and implement the policy before the COE bidding closes.
Exemptions and Existing Vehicles
The new three-year lock-in period does not apply to:
- Business-owned PHCs registered, converted, or transferred before February 19, 2025.
- Chauffeured PHCs owned by individuals, as these vehicles are typically used for both ride-hailing and personal travel.
Impact on Ride-Hailing Services in Singapore
This change will have a significant impact on ride-hailing companies and private-hire car leasing firms. With a more stable fleet, companies can better plan for demand fluctuations. However, businesses may face challenges in vehicle disposal, as they will need to retain cars for three years before selling them to individuals.
In recent years, demand for private-hire cars has surged due to an increase in ride-hailing services. This has also influenced COE prices, with more businesses bidding for PHCs. Transport Minister Chee Hong Tat noted that, between 2022 and 2024, the proportion of COE bids won by car leasing companies decreased from 26% to 10%, while individual buyers’ share increased to 84%.
What’s Next?
The LTA is expected to provide further updates on the second phase of the ongoing P2P industry review in March 2025. This review aims to balance vehicle supply for ride-hailing services while maintaining flexibility for businesses and drivers.
As Singapore’s transport landscape evolves, both businesses and private-hire drivers should stay informed about policy changes to navigate the industry effectively.
Conclusion
The new three-year lock-in period for business-owned private-hire cars marks a significant shift in Singapore’s ride-hailing landscape. While the policy aims to stabilize PHC supply, it also imposes new constraints on businesses managing their fleets. As the P2P industry review continues, stakeholders should keep an eye on further regulatory updates that may shape the future of private-hire transport in Singapore.
Stay tuned for more updates as the LTA unveils additional measures in the coming months.
