The Straits Times
Published on Dec 29, 2012

Target usage, not ownership of cars


THE issue of escalating certificate of entitlement (COE) prices for small cars ("COE premium for small cars crosses $80k mark"; Dec 20) is not about purchasers of luxury cars with small engines competing with budget car buyers.

The problem is that imposing a quota system is a blunt instrument for controlling congestion on the roads ("Car buyers want COE system reviewed"; Tuesday).

There are legitimate reasons for owning a car that have little impact on congestion.

For example, there may be people working in far-flung estates with long or inconvenient public transport links, or those who work odd hours, when public transport is not available.

Then there are those who use the car to ferry family members who need regular transport to places outside the city area, such as dialysis centres or schools.

Accessible transport is important to the running of the economy.

One of the achievements of the industrial revolution was that it increased labour mobility and economic flexibility by enabling factories to employ workers who lived far away.

If car prices continue going up, only the rich would have access to private transportation, and that is not a desirable outcome.

What is needed is a policy that makes not driving the car into a congested area the preferred choice.

This can only be achieved by higher congestion pricing and having a good public transport system, not by vehicle quotas.

Once a person pays the high cost of owning a car, subsequent usage of the car is determined only by the marginal cost of using the car, not the upfront cost of ownership.

In other words, a popular road will remain popular and hence, congested, even if cars are expensive.

The Government took a brave step in introducing the Area Licensing Scheme and subsequently, the Electronic Road Pricing scheme.

However, it needs to go further and make it really

hurt where it matters, in road usage.

It must, however, stop penalising people for mere ownership of a car.

Daniel Sim