It is important to appreciate the effects private-hire car firms have on COE premiums ("Concerns over private-hire car firms driving up COE premiums"; April 24).

The certificate of entitlement (COE) functions as a quota to regulate the number of motor vehicles in Singapore.

It is not limited solely to that function, as it is also an indicator of market demand and supply.

The entrance of private-hire car firms has resulted in increased competition in the COE bidding market. Now, private car owners have to compete with such firms in bidding for COEs.

In addressing this concern, the Land Transport Authority has to closely monitor the situation and establish comprehensive regulations.

The regulations should ensure that private-hire car firms do not squeeze private car owners out of the COE market.

Khidhir Asyraf