The COE for all categories of cars has breached $20K[Link] - car dealers accurately predicted this in Sep 2009 when the govt cut the number of COEs by 16%[Link]. Yes, what to do? More people want cars and Singapore has only so many roads so we have to ration car ownership and control the use of cars. The COE is a unique solution and the ERP is fairly unique - some countries collect toll for the use of highways but the ERP is a finer grained solution controling the use of stretches of roads that are congested. If the COE system is necessary - we were told that we will have crippling traffic jams without the COE, why haven't cities without COE fallen apart? Why are we the only ones with COE?..I'll answer this later.
In many countries, having a family car is very common if not a necessity but in Singapore it is considered a luxury and owning one is dream for many working class families. Because the number of COEs is fixed every year depending on the number of cars deregistered and allowing for a small limited growth, it is build into the system that many, if not most, families will never own a car. By importing more people who also compete for the limited number of COEs, even fewer Singaporeans can realise this dream.
The COE is allocated based on a bidding system i.e. it is allocated based on ability to pay rather than a person's needs. A family with 3 children has no priority over the teenage son of a tycoon - it is all decided based on who can spend more money. Now superimpose this COE system on a society with the highest level of income inequality in the developed world...hmmm what do you get? Then you supplement this with a 'for profit' public transport system which has shareholders to answer to. What you get is a transport system that people are constantly unsatisfied with. Cars are not going to the people who need it - families with children or individuals with disability but to people with money ...and a public transport system that has to tradeoff between service quality and profits for shareholders. Caught is this system is the working class father who has to carry his baby's stroller up a sardine packed bus and the mother who has to carry the baby and perhaps control a toddler who can't get a seat because the bus is packed and the tired Singaporean on the priority seat has closed his eyes and pretended to doze off.
Today as I was getting onto the MRT, I noticed that they have hired a woman wearing gloves at the platform. What are the gloves for? This woman will instruct the people on crowded trains to 'move to the center'. If they are too deaf or too stubborn, she will start using her hands to move them- that is why she needs the gloves. Why can't a supposedly world class govt run a public transport to maximise comfort for commuters without hiving it off to profit-seeking shareholders who want passengers to be packed like cattle so they can maximise their profits?
Now for the great mystery - why do we need the COE system when no other city's transport system has collapsed without implementing it? Why doesn't Seoul of pop. density double that of Singapore need to have COE? What about Tokyo....why hasn't it collapsed from a traffic gridlock without COE? What about Taipei which has a population density 1.5 times that of Singapore? We ended up with this unique COE system that brought in more revenue for the PAP govt from car ownership than any other govt in the world and we also have the one of the most profitable, if not the most profitable public transport system per capita (aka SMRT) in the world....actually the public transport system in most countries lose money. So what is the explanation for this great mystery?
The demand for cars depends a lot on the quality of service of the public transport system. If you take 2 hours driving to work, you will switch to the MRT if it gets you there in 1 hour. This is why most Tokyo residents leave their cars at home and take the subway - 1 in 2 households in Tokyo own cars[Link] but less than 10% use it to get to work. Most govts curb the growth of the car population and usage by investing heavily in public transport to make the network extensive and rides comfortable to lower the demand for cars[Link]. The Taipei subway for example arrives at less than 1 minute intervals during peak hours. In Seoul, the public transport network in up and running before people start moving into new residential areas to encourage them to use the public transport instead of buying cars.
By implementing its unique COE + ERP system, the PAP has been able to create a new source of revenue. At the same time, there is less pressure to improve the public transport rapidly now that the govt is able to control the absolute number of cars - the shares in public transport company have been sold to profit seeking shareholders and the public transport company now has to generate profit to distribute as dividends to these shareholders .No other city even those with far higher population density has needed to curb car population using a vehicle quota system....and no other govt in the world has been able to collect more revenue from car ownership than the PAP.