Yahoo Finance Motorcycle permits now cost more than motorcycles in Singapore
(Bloomberg) — Singapore’s reputation as one of the world’s most expensive cities now extends to one of its cheapest modes of transportation: motorcycles.
The cost of a 10-year motorcycle permit in the city-state hit a record S$12,801 ($8,984) this month according to data from the Land Transport Authority, up over 200% in four years and more than the cost of a new, entry-level bike in the Southeast Asian nation.
Singapore controls the number of permits, called certificates of entitlement (COE), as a way to limit the number of motorcycles and cars on the road. As of September, the city caps its motorcycle fleet at around 142,000. The number of cars is limited to about 650,000.
At current permit prices, drivers would need nearly S$20,000 to own and ride an entry-level motorcycle worth S$5,000.
That’ll eventually trickle down to delivery riders who zigzag the island on low-end bikes, Nathan Peng, a political science lecturer at the Singapore Management University, told Bloomberg. As of now, renewing an existing permit costs more than S$11,000 — less than a new one, but almost six times more than the price a decade ago.
Those who own their bikes will pay the increased fees directly, and those who rent are likely to see their fees go up. Many delivery drivers rent their vehicles, either from an independent operator or from a food delivery company like Grab.
Several motorcycle leasing companies in Singapore are considering rate hikes to make up for the higher permit costs, the Straits Times reported. One company, GigaRider, said it’s likely to raise rent by 10% in the first quarter of 2023 for its corporate clients. Grab notes on its website that rental charges may rise because of COE price hikes.
Singapore isn’t only targeting motorcycles. The land-scarce country is also limiting cars on the road — permits for entry-level cars now cost over S$80,000, nearly triple 2018.
Higher prices will add to the already-widening inequality among residents, though it’s difficult to predict the extent of the impact with limited data available, said Peng. For many low-income workers, a motorcycle is one of the very few cost-effective ways to meet work or family responsibilities.
“I don’t think motorcycles, for most, are a lifestyle choice,” said Peng. “If they could afford to take a Grab to work, they may not buy a motorcycle because of concerns like safety and comfort. Why would they take on the extra risk if they had a choice?”
Singapore has been trying to narrow its wealth gap, even as the cost of living rises. At an event on Oct. 10, Singapore’s prime minister-in-waiting Lawrence Wong pointed to the housing market as a sign that social stratification is becoming more entrenched, with more families with young children staying in rental flats.
©2022 Bloomberg L.P.
