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.
More than a third of Singapore's car population is between eight and 10 years old, but 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". So while a 91/2-year-old car may previously have gone to the scrapyard, it remains on the road for another six months.
Because the rental rate of such old vehicles is low, they are proving to be popular with former cabbies as well as people who are willing to be part-time drivers in order to have access to a car.
Respite
This small but much needed news may be the catalyst that Vicom is yearning for in a bid to counter the tsunami of cars heading for de-registration. This trend may soften the tough landing for Vicom's maintenance unit and hopefully smoothen the entire imbalance age of the COE issued in Singapore.
Vicom closed $6 on Wednesday, giving a yield of 4.38%. I'm still having the likings for this company due to the high barrier of entry and safe nature of its business.
Besides, they've the chance to raise their fees after keeping the same rates for about a decade.
I wrote an article about Vicom and how I think it's a good buy. The factors are still intact. Slow and steady eh?
No comments:
Post a Comment