<article>Malaysia is set to introduce a new e-hailing licensing regime in July and yet, there remain doubts and concerns over the industry’s readiness for it.</article>

Malaysia is set to introduce a new e-hailing licensing regime in July and yet, there remain doubts and concerns over the industry’s readiness for it.
The regulation, which was announced last November, requires all e-hailing drivers to register for a public service vehicle (PSV) licence and undergo a six-hour training at accredited driving centres. It was only on April 1 this year that the PSV module for e-hailing drivers was made available at 211 driving academies and e-hailing centres for a fee of up to 200 ringgit ($48.6 or S$66).
On top of that, drivers must get initial and annual vehicle checks at Computerised Vehicle Inspection Centres (Puspakom), pass criminal background and medical checks, contribute to Socso (Social Security Organisation), purchase add-on car insurance, and equip their cars with safety equipment, including fire extinguishers. The estimated cost to complete the requirements is about 800 ringgit ($194 or S$263).
The government says it remains on track to introducing the new regulation on July 12.
&#8220;As far as we are concerned, we have made the public announcement that the regulation will be enforced by July 12, and we’re sticking to that. So, we hope everyone can come together to ensure the whole process will be smooth to see how we can register all e-hailing drivers,&#8221; Transport Minister Anthony Loke said last week at a Grab press conference.
To date, 25 e-hailing companies in Malaysia have submitted their applications to be regulated by the transport ministry. According to Land Public Transport Agency’s (APAD) deputy director general (operations) Azlan Shah Al-Bakri, 16 of these companies have been approved to conduct their businesses in the country, five bagged conditional approval, three are under process, and two were rejected.
In February, Grab Malaysia had <a href="https://www.grab.com/my/press/consumers-drivers/the-spirit-of-the-regulation/">issued a statement</a> noting that there seemed to be a &#8220;lack of readiness&#8221; by certain agencies to help the industry progress towards compliance.
&#8220;On behalf of all our driver-partners and us at Grab, we express our deep concern that the processes and infrastructure necessary to ensure a seamless transition are taken too lightly. These issues will not only affect the e-hailing industry, but also the millions of people who rely on e-hailing to get around, and the hundreds of thousands of Malaysians who boost their household income via e-hailing,&#8221; it had said.
The ride-hailing major also warned that without more transparency, the regulation could end up increasing costs and friction, thereby significantly impacting service availability.
Last week, an advisor to local taxi company Big Blue Taxi Facilities, Shamsubahrin Ismail, urged the government to <a href="https://www.theedgemarkets.com/article/do-not-extend-registration-period-ehailing-licence-%E2%80%94-big-blue-taxi">not extend the registration period</a> for e-hailing drivers to secure their licences.
Loke said more than 1,000 drivers had registered for the PSV course and that registration was ongoing. To put that number in perspective, there are an estimated 300,000 e-hailing drivers in the country.
What complicates matters further is that about 75 per cent of these drivers are part-time workers. Most find the new licence application process cumbersome.
“Why should we be regulated? We’re only doing this on a part-time basis. Imagine having to take time off to go for a course, medical checkup and vehicle inspection. I’m not sure about quitting as a part-time driver, but I’m taking a wait-and-watch approach on this,” said an e-hailing driver, who only wished to be identified as Hafiz.
Patrick Goh, who has been a full-time e-hailing driver for over a year, said such stringent licensing will sabotage the gig economy.
“The reason people chose to be an e-hailing driver is because they want to earn an extra living. We have already gone through briefings and training sessions given by e-hailing operators, so why should we need a formal license for this?
“Also, the fees that we need to pay in order to get the license. We’re just trying to make a living. Why impose all these restrictions and regulations on us? I hope the ministry would reverse the decision, else, I might quit being an e-hailing driver,” he said.
<h3>Drivers to quit?</h3>
According to local media, the e-hailing industry <a href="https://www.nst.com.my/news/nation/2019/04/476841/drivers-quit-over-e-hailing-ruling">may be hit with a shortage of drivers</a> when the regulations come into effect in July as at least 20 per cent of them (most likely to be part-timers) plan to quit. However, the largest player in the industry, Grab Malaysia, said as of now, no drivers on its platform had quit.
“There is no single reason that could cause our drivers to hang their car keys and not earn an extra living. Like mentioned by Anthony (Loke), we have to work with the Ministry to smoothen the process and it is a difficult task &#8211; it’s the first time we’re doing this as well,&#8221; said Grab Malaysia country head Sean Goh.
Minister Loke said all e-hailing drivers &#8211; be it full-time or part-time &#8211; will be subjected to similar regulations.
“We can’t really differentiate who are the part-timers and those who are not. As far as we are concerned, all e-hailing drivers are subjected to the same regulations across the board. Yes, this is a little bit cumbersome, that they have to go for the course and get the licence.
“But look at it this way, the industry will be regulated and drivers can operate in a secure environment. We don’t want the industry to be continuously in dispute with the traditional taxi industry. You only have to do it for once, and then you can renew your licence on an annual basis,” he said.
Loke acknowledged that it is a challenging period for the e-hailing industry but he urged all parties to work with the government to ensure that the entire licensing process is smooth.
“We want [the industry] to be legalised, and we want the drivers to feel safe and to have a legal means to earn a living. We do not want e-hailing drivers to be referred to as someone that is [doing an] illegal [job]&#8230; But sometimes people are not used to regulations because they think that it is troublesome,” he said.
A spokesperson for the public transport regulator APAD told DEALSTREETASIA that all government agencies under the Transport Ministry involved in the e-hailing regulation are constantly engaging with the industry players to provide clarity on the topic.
“Currently, there is no intention to control the number of e-hailing drivers for the licence applications but we will monitor the situation to ensure there will not be a surplus of supply,” he said.
According to a report published last November by local thinktank Institute for Democracy and Economic Affairs (IDEAS), the regulations introduced are somewhat costly and duplicate existing processes for e-hailing operators and drivers.
“We recommend that the government take the opportunity for a ‘blank slate’ approach: reforming the regulations for both e-hailing and traditional taxi services to make both industries more competitive,” it said.
Recommendations by IDEAS on developing regulation for the Malaysian e-hailing industry
<a href="https://media.dealstreetasia.com/uploads/2019/04/Screen-Shot-2019-04-11-at-4.22.19-PM.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-130374 size-full" src="https://media.dealstreetasia.com/uploads/2019/04/Screen-Shot-2019-04-11-at-4.22.19-PM-e1555277525610.png?resize=578,592" alt="" srcset="https://media.dealstreetasia.com/uploads/2019/04/Screen-Shot-2019-04-11-at-4.22.19-PM-e1555277525610.png?w=578 578w, https://media.dealstreetasia.com/uploads/2019/04/Screen-Shot-2019-04-11-at-4.22.19-PM-e1555277525610.png?resize=293,300 293w" sizes="(max-width: 578px) 100vw, 578px" data-recalc-dims="1" /></a>
<h3>Taxi woes</h3>
The e-hailing industry has been at loggerheads with traditional taxi operators since Grab and others set foot in Malaysia. Many taxi drivers have claimed that the e-hailing drivers are disrupting their livelihoods.
Taxi operators have in the past <a href="https://www.thestar.com.my/news/nation/2018/11/05/taxi-drivers-demand-meeting-with-anthony-loke-or-they-will-protest/">demanded that the Malaysian government strictly regulate the e-hailing companies</a>, going as far as proposing a blanket ban on services offered by the latter. The transport minister <a href="https://www.dealstreetasia.com/stories/malaysia-minister-grab-ban-110312/">had clarified </a>that the government will not ban the operations of ride-hailing companies.
What do the consumers think of this ongoing spat? Daily commuter Chang, who wished to only use one name, said taking local taxis meant having to deal with drivers who refused to use the meter and charged exorbitantly even for short distances.
“With e-hailing, it’s simpler. I can just hail a car via the app, and the price is displayed on it. Everything is transparent,” she said.
The APAD spokesperson said it boiled down to the quality of service delivered.
“At the end of the day, there’s only so much discount that could be offered by the e-hailing operators. I’m already seeing that the fares offered by e-hailing companies and taxis are almost the same. The taxi industry has to learn how to co-exist with the e-hailing industry and reflect on their services to win back the consumers’ confidence,” he said.
Also Read:
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/malaysia-minister-grab-ban-110312/">Malaysia’s transport minister clarifies Grab will not be banned</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/malaysia-ride-hailing-grab-101738/">Malaysia regulates ride-hailing firms, to investigate monopoly risk after Grab-Uber deal</a>

E-hailing operators and drivers say the new regulations will adversely affect them, while taxi companies have asked the government to stick to timeline.

Bumpy ride ahead for industry as Malaysia looks set to introduce new e-hailing regulations

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