Singapore has the highest level of GDP per head in the region, but overall population is small. Motorcycles are viewed mainly as utility vehicles and wealthier citizens prefer cars. Larger displacement motorcycles are generally purchased by foreigners with a different attitude. No motorcycle production takes place in Singapore, but some makers have offices there from which they coordinate regional activity. All motorcycles are therefore imported and subject to significant import tax. Singapore is recognized for its pioneering approach to road traffic management, which is the focus of this page.

Area Licensing Scheme

The Area Licensing Scheme (ALS) was introduced in 1975 to manage congestion in the Central Business District (CBD). Under the ALS, motorists had to purchase a paper licence if they wished to enter a cordoned area known as the Restricted Zone (RZ) during the morning peak hours. Together with the introduction of ALS, the parking charges in the CBD and vehicle taxes were raised. The bus network was also enhanced to give commuters more travel options. Taken together, these measures resulted in an immediate 76% cut in the number of cars entering the RZ during licensing hours.

Vehicle Quota System

In 1990, Singapore introduced a Vehicle Quota System (VQS) to rein in the rapid growth in the vehicle population. Under the VQS, a person who wishes to buy a new vehicle must first obtain a Certificate of Entitlement (COE). The COE quota is calculated from three components:

1) Provision for annual 1.5% vehicle population growth (3% before May 2009).

2) Replacement COEs for vehicles deregistered

3) Adjustment for over-projections of vehicle de-registrations from previous years.

With a limited supply of COEs available, the allocation is governed by an auction mechanism. Fairness is ensured for automobiles by the presence of various categories based on use and displacement, whereas all 2-wheelers are gathered in a single category.

This mechanism strictly regulates growth in the market.

Electronic Road Pricing System

The transition in 1998 from the ALS to the Electronic Road Pricing (ERP) system signalled a fundamental shift in Singapore’s road pricing strategy. The ERP provides greater flexibility for the congestion charges to be fixed based on different locations and times of the day, depending on the prevailing traffic condition. It is also based on a pay-as-you use principle, where the congestion charge is instantaneously deducted from a stored value card in an In-vehicle Unit (IU) every time the vehicle uses a priced road. Instead of simply relying on high car ownership cost to manage congestion on the road, the Government has been reducing vehicle taxes and shifting more towards usage charges (through the ERP) to manage the demand for road space.

Nevertheless, owning a car is still a substantial investment even without the taxes. There is thus an inherent tendency for the car owner to maximise its usage once the car is bought. Hence, the Government thinks it is important to strike a balance between using ownership control and implementing usage charges to manage overall road congestion.


As more and more cities across the world face issues of traffic congestion and localized pollution, Singapore is a working example of innovative solutions. By applying an overall cap on vehicles in use and using pioneering traffic control technology it has been able to optimize traffic flow. Favored by its city state size it's ideally suited to enforce such comprehensive measures.

At the same time it has continued investing heavily in integrated public transport systems which represent a convenient alternative to vehicle ownership.