Demand for old cars by taxi app operators slows scrappage

The number of cars taken off the road has slowed, contrary to expectations, as taxi app operators like Uber and GrabTaxi snap up older vehicles to grow their rental fleets, reports The Straits Times.

According to the Land Transport Authority (LTA), car deregistrations slowed to 5,191 last month, 16 percent lower than July's figure and the second-lowest figure this year. Motor industry players were expecting more cars taken off the road as their Certificates of Entitlement (COE) reach expiry at the end of the 10^th year.

The recent phenomenon may be putting the brakes on the scrap rate. Taxi app firms Uber and GrabTaxi are snapping up older cars and renting them out as 'limousines' which ply like 'on-call cabs'.

Prime Group, a diversified motor group which is a huge supplier to both Uber and GrabTaxi, says demand is growing strongly. Chairman Mr. Neo Nam Heng estimates the two operators now have a combined fleet of more than 2,500 cars. That is more than Premier - the fourth-largest taxi company here - has in its fleet.

Motor traders expressed concern over the slowdown in the deregistration rate, as it largely determines the COE supply. Mr. Ron Lim, General Manager of Nissan agent Tan Chong Motor, noted the reduction in deregistrations last month amounted to nearly 1,000 vehicles.