Mitigating supply and price volatilities in Singapore’s vehicle quota system

Traffic congestion in city-state Singapore is managed by vehicle ownership restraint complemented with usage charges in bottleneck zones. A certificate of entitlement (COE) obtained from auctions held twice a month is required to register any new vehicle. As Singapore sticks to a target vehicle population, the quota of COEs availed in the auctions hinges critically on the number of vehicles deregistered before the 10 years expiry of the COE. The paper demonstrates that vehicle deregistrations are negatively influenced by the prevailing COE prices. This engenders boom and bust cycles in the COE quotas and thereby spurs price volatility. It is also shown that below an empirically-derived breakpoint quota, COE prices surge and they may also correlate negatively with bidding competition. To avoid such undesirable situations, a proposal is made to allocate the breakpoint quota as a minimum by borrowing from future quotas. This will help smooth quota and price volatilities while adhering to medium-term vehicle population targets. The practicality of the proposal is discussed against various alternatives.     

Sealed v/s open bids for certificates of entitlement under the vehicle quota system in Singapore

The Vehicle Quota System manages vehicle ownership in Singapore by making the procurement of a Certificate of Entitlement (COE) a prerequisite for the registration of a new vehicle. The procurement is done during uniform price auctions of quotas of COEs currently held on a twice-a-month schedule. The auction format which started out as sealed bids in May 1990 changed to open bids in July 2001. This paper uses a regression model framework to investigate if this shift in auction format has resulted in lower COE premium volatility and a better reflection of demand and supply forces. The empirical results are pertinent to transport policy analysis. A suggestion in the form of incentives for early bids is also made to improve the efficiency of the open bids auction.     

Electric vehicle parking in European and American context: Economic,energy and environmental analysis

The transportation sector faces increasing challenges related to energy consumption and local and global emissions profiles. Thus, alternative vehicle technologies and energy pathways are being considered in order to overturn this trend and electric mobility is considered one adequate possibility towards a more sustainable transportation sector.In this sense, this research work consisted on the development of a methodology to assess the economic feasibility of deploying EV charging stations (Park-EV) by quantifying the tradeoff between economic and energy/environmental impacts for EV parking spaces deployment. This methodology was applied to 4 different cities (Lisbon, Madrid, Minneapolis and Manhattan), by evaluating the influence of parking premium, infrastructure cost and occupancy rates on the investment Net Present Value (NPV). The main findings are that the maximization of the premium and the minimization of the equipment cost lead to higher NPV results. The NPV break-even for the cities considered is more “easily” reached for higher parking prices, namely in the case of Manhattan with the higher parking price profile. In terms of evaluating occupancy rates of the EV parking spaces, shifting from a low usage (LU) to a high usage (HU) scenario represented a reduction in the premium to obtain a NPV = 0 of approximately 14% for a 2500 € equipment cost, and, in the case of a zero equipment cost (e.g. financed by the city), a NPV = 0 was obtained with approximately a 2% reduction in the parking premium. Moreover, due to the use of electric mobility instead of the average conventional technologies, Well-to-Wheel (WTW) gains for Lisbon, Madrid, Minneapolis and Manhattan were estimated in 58%, 53%, 52% and 75% for energy consumption and 66%, 75%, 62% and 86% for CO₂ emissions, respectively.This research confirms that the success of deploying an EV charging stations infrastructure will be highly dependent on the price the user will have to pay, on the cost of the infrastructure deployed and on the adhesion of the EV users to this kind of infrastructure. These variables are not independent and, consequently, the coordination of public policies and private interest must be promoted in order to reach an optimal solution that does not result in prohibitive costs for the users.     

What is the market potential of plug-in electric vehicles as commercial passenger cars? A case study from Germany

Commercial passenger cars are a possible early market segment for plug-in electric vehicles (PEVs). Compared to privately owned vehicles, the commercial vehicle segment is characterized by higher mileage and a higher share of vehicle sales in Germany. To this point, there are only few studies which analyze the commercial passenger car sector and arrive at contradictory results due to insufficient driving profile data with an observation period of only one day. Here, we calculate the market potential of PEVs for the German commercial passenger car sector by determining the technical and economical potential for PEVs in 2020 from multi-day driving profiles. We find that commercial vehicles are better suited for PEVs than private ones since they show higher average annual mileage and drive more regularly. About 87% of the analyzed three-week vehicle profiles can technically be fulfilled by battery electric vehicles (BEVs) with an electric driving range of about 110 km while plug-in hybrid electric vehicles (PHEVs) with an electric range of 40 km could obtain an electric driving share of 60% on average. In moderate energy price scenarios, PEVs can reach a market share of 2–4% in the German commercial passenger car sales by 2020 and especially the large commercial branches (Trade, Manufacturing, Administrative services and Other services) are important. However, our analysis shows a high sensitivity of results to energy and battery prices as well as electric consumptions.     

Land Transport Policy and Public Transport in Singapore

Singapore has a sophisticated and efficient system of land transport to serve a growing demand for transportation. Constrained by limited space, a comprehensive set of land transport policies has been in place to balance the growth in transport demand and the effectiveness and efficiency of the land transport system. A multi-pronged approach has been used to achieve the objective of a world-class transportation system. These include integration of urban and transport planning, expansion of the road network and improvement of the transport infrastructure, harnessing the latest technology in network and traffic management, managing vehicle ownership and usage, and improvement and regulations of public transport (Ministry of Transport (MOT) (2003) Policy and Regulations, Land Transport, Available: www.mot.gov.sg, Date of Access: 15 September 2003). Singapore was the first country in the world to introduce various new techniques, notably the Area License Scheme (ALS) in 1975 and the Vehicle Quota System (VQS) in 1990. An Electronic Road Pricing (ERP) system replaced the ALS in 1998 to take the role of congestion management, the experience of which has also drawn particular attention from many large cities in the world. In 2003, the world’s first and only fully automatic heavy rail Mass Rapid Transit system was opened to the public, marking a new chapter in Singapore’s innovative approach to solving its land transport problem. This paper reviews the land transport policy implemented in Singapore and pays special emphasis to its public transportation systems.     

Rationing and pricing strategies for congestion mitigation: Behavioral theory,econometric model,and application in Beijing

Some travel demand management policies such as road pricing have been widely studied in literature. Rationing policies, including vehicle ownership quota and vehicle usage restrictions, have been implemented in several megaregions to address congestion and other negative transportation externalities, but not well explored in literature. Other strategies such as Vehicle Mileage Fee have not been well accepted by policy makers, but attract growing research interest. As policy makers face an increasing number of policy tools, a theoretical framework is needed to analyze these policies and provide a direct comparison of their welfare implications such as efficiency and equity. However, such a comprehensive framework does not exist in literature. To bridge this gap, this study develops an analytical framework for analyzing and comparing travel demand management policies, which consists of a mathematical model of joint household vehicle ownership and usage decisions and welfare analysis methods based on compensating variation and consumer surplus. Under the assumptions of homogenous users and single time period, this study finds that vehicle usage rationing performs better when relatively small percentages of users (i.e. low rationing ratio) are rationed off the roads and when induced demand elasticity resulting from congestion mitigation is low. When the amount of induced demand exceeds a certain level, it is shown analytically that vehicle usage restrictions will always cause welfare losses. When the policy goal is to reduce vehicle travel by a fixed portion, road pricing provides a larger welfare gain. The performance of different policies is influenced by network congestion and congestibility. This paper further generalizes the model to consider heterogenous users and demonstrates how it can be applied for policy analysis on a real network after careful calibration.     

Singapore’s Vehicle Quota System and its impact on motorcycles

Singapore’s Vehicle Quota System, implemented in 1990, uses uniform-price auctions to allocate Certificates of Entitlement (COE) or registration rights in five categories presently. Four of these are restricted to small and big cars, commercial vehicles and motorcycles. The fifth one is unrestricted as it allows successful bidders to register a vehicle in any restricted category of their choice. Owners are incentivised via another policy to deregister their vehicle by the tenth year expiry of the COE instead of revalidating it. Each deregistration results in a new COE. Currently, 10% of the COEs from each restricted category is channelled to the unrestricted category. However, hardly any of the expensive COEs in the unrestricted category has been used to register motorcycles. The sharp decline in the number of motorcycle COEs since 2014 has led to a surge in auction premiums at about twice the price of an entry-level motorcycle. The auction process before 2014 is shown to be exemplary with the COE premium driven by its inertia and a host of exogenous factors. After 2014 however, it appears to be unresponsive to the historically low quota levels. This undesirable auction trait needs to be remedied by a reformulation of the COE quota in order to help those most in need of a motorcycle to earn a living. Measures announced in the February 2017 Singapore Budget trudge in that direction.     

How might potential future plug-in electric vehicle buyers differ from current “Pioneer” owners?

The entry of various plug-in electric vehicles (PEVs) into the passenger vehicle sector provides novel opportunities to learn about the potential for future PEV markets. However, early PEV buyers (or “Pioneers”) can substantially differ from present conventional vehicle owners that have interest in purchasing PEVs in the future (or the “Potential Early Mainstream buyers”). To compare the characteristics, preferences, and motivations of Pioneers and Potential Early Mainstream buyers, we draw data from the Canadian Plug-in Electric Vehicle Study, a three-part mixed-mode survey with samples of PEV owners (n = 94) and conventional new vehicle buyers (n = 1754). We identify several significant differences in household characteristics, including income, education, and recharge access. In terms of preferences, Pioneers express extremely high valuation of PEVs and prefer pure battery electric vehicle (BEV) designs over plug-in hybrid electric (PHEV) designs. In contrast, Potential Early Mainstream respondents prefer PHEVs. Both Pioneer and Potential Early Mainstream respondents are similarly cautious about controlled charging programs, but Pioneers place five times as much value on using electricity generated from renewable sources than the Potential Early Mainstream. Pioneers also tend to have different motivations, including significantly higher levels of environmental concern, and higher engagement in environment- and technology-oriented lifestyles. Policymakers, automakers, and electric utilities that anticipate a transition to electric mobility ought to consider how potential future PEV buyers may differ in their vehicle preferences, usage and motivations relative to current PEV owners.     

Singapore motorisation restraint and its implications on travel behaviour and urban sustainability

The example of Singapore shows that rapid urban and economic growth does not have to bring traffic congestion and pollution. Singapore has chosen to restrain car traffic demand due to its limited land supply. Transport policy based on balanced development of road and transit infrastructure and restraint of traffic has been consistently implemented for the past 30 years. Combined with land use planning, it resulted in a modern transport system, which is free from major congestion and provides users with different travel alternatives. As the economic growth caused a substantial increase in demand for cars, several pricing policies were introduced with the aim of restraining car ownership and usage. Growth of the vehicle population is now controlled and potentially congested roads are subject to road pricing. These measures help to keep the roads free from major congestion, maintain car share of work trips below 25% and keep the transport energy usage low. Although Singapore conditions are in many aspects unique, its travel demand experience can provide useful lessons for other rapidly growing cities in Asia.

Stochastic dynamic switching in fixed and flexible transit services as market entry-exit real options

The first analytical stochastic and dynamic model for optimizing transit service switching is proposed for “smart transit” applications and for operating shared autonomous transit fleets. The model assumes a region that requires many-to-one last mile transit service either with fixed-route buses or flexible-route, on-demand buses. The demand density evolves continuously over time as an Ornstein-Uhlenbeck process. The optimal policy is determined by solving the switching problem as a market entry and exit real options model. Analysis using the model on a benchmark computational example illustrates the presence of a hysteresis effect, an indifference band that is sensitive to transportation system state and demand parameters, as well as the presence of switching thresholds that exhibit asymmetric sensitivities to transportation system conditions. The proposed policy is computationally compared in a 24-hour simulation to a “perfect information” set of decisions and a myopic policy that has been dominant in the flexible transit literature, with results that suggest the proposed policy can reduce by up to 72% of the excess cost in the myopic policy. Computational experiments of the “modular vehicle” policy demonstrate the existence of an option premium for having flexibility to switch between two vehicle sizes.     

Demand management as an element of transportation policy: using carrots and sticks to influence travel behavior

This paper describes the characteristics of transportation demand management. The origin of transportation demand management (TDM) as it has evolved in the US is related to federal policy initiatives that first focused on improving the efficiency of the urban transportation system through operational improvements, and then incorporated concerns such as air quality and energy conservation into the transportation planning process. The paper then examines the effectiveness of TDM actions, and concludes that those actions most likely to increase the “price” of travel for single occupant vehicle use will be most effective. The paper identifies several strategies for improving the effectiveness of TDM actions in the context of regional transportation planning, including: incorporating TDM as part of the solutions for regional transportation planning, linking TDM to land use decisions, making the costs of travel more apparent to the user, and making TDM implementation more palatable to the general public.     

On the electrification of road transportation – A review of the environmental,economic, and social performance of electric two-wheelers

Electrification is widely considered as a viable strategy for reducing the oil dependency and environmental impacts of road transportation. In pursuit of this strategy, most attention has been paid to electric cars. However, substantial, yet untapped, potentials could be realized in urban areas through the large-scale introduction of electric two-wheelers. Here, we review the environmental, economic, and social performance of electric two-wheelers, demonstrating that these are generally more energy efficient and less polluting than conventionally-powered motor vehicles. Electric two-wheelers tend to decrease exposure to pollution as their environmental impacts largely result from vehicle production and electricity generation outside of urban areas. Our analysis suggests that the price of e-bikes has been decreasing at a learning rate of 8%. Despite price differentials of 5000 ± 1800 EUR₂₀₁₂ kW h⁻¹ in Europe, e-bikes are penetrating the market because they appear to offer an apparent additional use value relative to bicycles. Mid-size and large electric two-wheelers do not offer such an additional use value compared to their conventional counterparts and constitute niche products at price differentials of 700 ± 360 EUR₂₀₁₂ kW⁻¹ and 160 ± 90 EUR₂₀₁₂ kW⁻¹, respectively. The large-scale adoption of electric two-wheelers can reduce traffic noise and road congestion but may necessitate adaptations of urban infrastructure and safety regulations. A case-specific assessment as part of an integrated urban mobility planning that accounts, e.g., for the local electricity mix, infrastructure characteristics, and mode-shift behavior, should be conducted before drawing conclusions about the sustainability impacts of electric two-wheelers.     

Fuel price elasticities for single-unit truck operations in the United States

This paper provides fuel price elasticity estimates for single-unit truck activity, where single-unit trucks are defined as vehicles on a single frame with either (1) at least two axles and six tires; or (2) a gross vehicle weight greater than 10,000 lb. Using data from 1980 to 2012, this paper applies first-difference and error correction models and finds that single-unit truck activity is sensitive to certain macroeconomic and infrastructure factors (gross domestic product, lane miles expansion, and housing construction), but is not sensitive to diesel fuel prices. These results suggest that fuel price elasticities of single unit truck activity are inelastic. These results may be used by policymakers in considering policies that have a direct impact on fuel prices, or policies whose effects may be equivalent to fuel price adjustments.     

New methods of controlling vehicle ownership and usage in Singapore

Over the years Singapore has introduced several fiscal measures aimed at restraining car ownership and usage and thus preventing traffic congestion. Two new methods have recently been added: the Vehicle Quota System which limits the number of new vehicles registered each month and the Weekend Car Scheme which allows cars to be registered for use during off-peak hours only, with substantial financial savings to the owners. The Vehicle Quota System involves monthly public tenders for Certificates of Entitlement needed to register new cars. Over the past 30 months the cost of COE's has been increasing and now constitutes between 12% and 27% of the on-the-road price of a new car. The fluctuations in the COE premiums for different vehicle categories are presented and analysed. The initial problems and the recent modifications made as a result of public pressure are also described. It seems that the increases in COE premiums are likely to continue under strong economic growth conditions as the demand for cars is more income-elastic than price-elastic.     

Vehicle attribute trade-offs to meet the 2025 CAFE fuel economy target

The literature analyzes changes in vehicle attributes that can improve fuel economy to meet Corporate Average Fuel Economy (CAFE) standards. However, these analyses exclude either vehicle price, size, acceleration or technology advancement. A more comprehensive examination of the trade-offs among these attributes is needed, this case study focuses on technically feasible modifications to a reference 2012 vehicle to meet the 2025 fuel economy target. Scenarios developed to examine uncertainty in technology advancement indicate that expected technology cost reductions over time will be insufficient to offset the costs of additional fuel efficiency technologies that could be used to meet the 2025 fuel economy target while maintaining other vehicle attributes. The mid-price scenario results show the targeted 66% increase in fuel economy from 2012 to 2025 can be achieved with (i) a 10% ($2070) vehicle price increase (lightweight hybrid electric vehicle), (ii) a 31% (2.9 second) increase in the 0–97 km/h (60 mph) acceleration time (smaller engine), or (iii) a 17% (700 L) decrease in interior volume (smaller body) while maintaining other vehicle attributes. These results are consistent with those obtained using methods that generalize the US light-duty vehicle fleet, but are not a forecast of future vehicle attributes because combinations of less perceptible changes to vehicle price, acceleration and size would also be feasible. This study shows there are numerous ways that 2025 fuel economy targets can be met; therefore, the trade-offs quantified provide important insights on the implications of future CAFE standards.     

National policy towards cars: Singapore

Singapore has experienced rapid growth in car ownership, and private transport accounts for just under half of motorized trips in Singapore. Yet only since 1970 have determined efforts been made to curtail this increase. Simultaneously with this growth, Singapore's land‐use planners had called for the diversion of population growth into outlying residential estates while maintaining the central area's importance as an employment centre. The resulting anticipated concentration of commuter movement suggested a need for controls to restrain car ownership, reduce central‐area congestion and divert road users on to public transport. The policies followed are described. Those against ownership have included heavy road taxes and registration fees, with a system of discounts on the latter to discourage new purchasers except when replacing scrapped cars. Policies against car use include fuel taxes and the Area Licensing Scheme in the city centre, while parking space is also closely regulated. The measures adopted imply a goal of efficiency in promoting Singapore's planning objectives rather than environmental, safety or equity considerations, although the first two of these have lately received much more attention than formerly. The policies’ effect has been a temporary reversal in the growth of car ownership, but this growth has since resumed and recent further fee increases suggest a panic reaction rather than a coordinated strategy. Such coordination appears at present to be hampered by the fragmented administration of matters relating to transport. Other measures relating to car ownership and use in Singapore are also described.     

China’s electric car frustrations

By 2020, the vehicle population in China will likely exceed 280 million—exacerbating national energy security, urban air pollution, and traffic congestion. In response, many local and regional governments in China are pursuing an expanding array of measures to restrain growth in personal vehicle ownership and, along with the central government, reducing emissions and energy use of vehicles. One prominent strategy is the promotion of new energy vehicles, especially plug-in electric vehicles (PEVs). Large subsidies were offered—up to $27,600 (171,000 RMB) per vehicle in some regions, including almost $9200 (57,000 RMB) from the central government—which suggests that China is making a major commitment to PEVs. But sales have been meager. In 2013, only 17,600 PEVs, mostly buses and utility trucks, were sold, less than 0.1% of total civilian vehicle sales. Several factors explain the failure of PEV sales to take off: (1) protectionism by local governments; (2) uncertainty over which electric-drive vehicle technologies to promote and what consumers are willing to pay, (3) lagging investments in charging infrastructure, and (4) conservative investment behavior by automakers and battery manufacturers. The central government issued directives to local governments in late 2013 to reduce barriers to out-of-town companies, resulting in modest sales increases in early 2014, but a more coherent, broader, and effective set of policies, incentives, and strategies are needed to overcome consumer and industry resistance and the lack of charging infrastructure.     

Joint impact of competition,ownership form and economic regulation on airport performance and pricing

The combined impact of ownership form, economic regulation and competition on airport performance is analyzed using data envelopment analysis to measure cost efficiency in the first stage and regression analysis to measure the impact of the environment in the second stage. The empirical results of an analysis of European and Australian airports over a 10 year timeframe reveal that under relatively non-competitive conditions, public airports operate less cost efficiently than fully private airports. Irrespective of ownership form, regulation is necessary to emulate competitive forces thus pushing airport management towards cost efficiency and reasonable pricing policies. Under potential regional or hub competition, economic regulation inhibits airports of any ownership form from operating and pricing efficiently. Although public and fully private airports operate equally efficiently in a competitive setting, private airports still set higher aeronautical charges. Furthermore, mixed ownership forms with a majority public holding are neither cost efficient nor low price, irrespective of the level of competition.     

Estimation of nitrogen oxides emissions from petrol and diesel passenger cars by means of on-board monitoring: Effect of vehicle speed,vehicle technology,engine type on emission rates

NO_X emission rates of 13 petrol and 3 diesel passenger cars as a function of average speed from 10 to 120 km/h, emission class (pre-Euro 1 – Euro 5), engine type were investigated by on-board monitoring on roads and highways of St. Petersburg using a portative Testo XXL 300 gas analyzer. The highest level of NO_X emission 0.5–2.5 g/km was inherent to old pre-Euro 1 petrol cars without a catalytic converter. NO_X emissions rates of Euro 1 and Euro 2 petrol cars changed within 0.15–0.9 g/km, Euro 3 – 0.015–0.27 g/km, Euro 4 – 0.013–0.1 g/km, Euro 5 – 0.002–0.043 g/km. Euro 3 – Euro 4 petrol cars generally satisfied corresponding NO_X Emission Standards (ES), except cold-start period, Euro 5 petrol cars did not exceed ES. Warmed, stabilized engines of Euro 3 – Euro 5 petrol cars showed 5–10 times lower NO_X emission rates than corresponding ES in the range of speed from 20 to 90 km/h. NO_X emission rates of diesel Euro 3 and Euro 4 cars varied from 0.45 to 1.1 g/km and from 0.31 to 1.1 g/km, respectively. Two examined diesel Euro 3 and one Euro 4 passenger vehicles did not satisfy NO_X ES at real use. Euro 3 diesel cars showed 28.9 times higher NO_X emissions than Euro 3 petrol cars and Euro 4 diesel car demonstrated 17.6 times higher NO_X emissions than Euro 4 petrol cars at warmed and stabilized engine at a cruise speed ranging from 30 to 60 km/h.