During last week's Certificate of Entitlement (COE) tender, Uber-owned Lion City Rental submitted more than 800 bids, which accounted for 11 percent of the total bids made for car COEs, reported The Straits Times. Just over three years ago, the Transport Ministry removed taxis from the COE bidding process to take some heat off car bidders. Now, three years after third-party taxi app provider Uber arrived, the heat is back on.

According to market talk, Lion City is looking to put 1,800 new cars on the road in anticipation of growing demand. Rival company Grab is also expected to do the same. The two already have between them some 10,000 cars - mostly old vehicles. But in recent months, both have started sourcing for new vehicles, and are jostling with private car owners for fresh COEs.

Now, with the Government announcing "light touch" regulations governing third-party taxi apps, the proliferation of private-hire vehicles will accelerate. Most of the taxi companies are also starting up private-hire subsidiaries to compete with Uber, Grab and other small players like Smove and Tribecar.

This will only intensify the competition for COEs, which explains why car premiums have not fallen in tandem with the growth in supply. If the demand for private-hire services continues to grow, taxi operators are likely to shrink their cab fleets and switch. Again, this will fuel demand for COEs. Most private-hire cars are smaller vehicles, so the pressure will be greater on Cat A COE bidders.