Protect local car buyers from private-hire car firms

In land-scarce Singapore, road infrastructure, like property, is a highly valuable resource.

In the property sector, locals have been given some advantages, with restrictions on foreign ownership in a large part of the property market, namely the public housing and landed property segments.

Foreigners also have to pay a higher upfront buyer stamp duty when purchasing private properties.

These measures have prevented Singapore from becoming a city where locals can afford to only rent from foreign owners, which would have been the case if prices were driven up beyond affordability by foreign buyers.

Likewise, Singaporeans should also be given some protection on car ownership, which is a derivative of road infrastructure.

With the entry of foreign private-hire car companies such as Uber and Grab, the car ownership landscape is fast changing.

If left unchecked, certificate of entitlement (COE) prices, along with car prices, will be driven up to levels beyond the affordability of Singaporeans.

Allowing buyers to take on a larger car loan will provide only a temporary improvement in affordability. In the long term, it will result in significantly higher COE prices, as foreign private-hire car companies have significant financial resources to bid aggressively for COEs.

Eventually, locals may be left with the options of either taking public transport or renting cars from one of these foreign companies.

Yeo Chee Kean