Malaysia’s transport authorities lift ride-hailing rule: Report

Photographer: Ore Huiying/Bloomberg

Malaysian authorities have backtracked on an earlier rule that requires drivers to change their individual private vehicles to e-hailing private vehicles to become registered e-hailing drivers.

According to a Bernama report, the country’s Transport Ministry and the Road Transport Department have decided to remove the requirement after receiving complaints from e-hailing drivers.

DEALSTREETASIA had earlier reported how the regional ride-hailing industry is facing roadblocks when it comes to regulation at a time when home-grown startups such as GOJEK and Grab have become an important part of people’s everyday life.

Malaysia’s Road Transport Act stipulates that private vehicles should not be used for commercial purposes. Previously, it was mandatory for all prospective e-hailing drivers to convert their vehicles from a ‘private vehicle use code’ to an ‘e-hailing use code’.

The report quoted Transport Minister Anthony Loke Siew Fook as saying that e-hailing drivers are now given the flexibility to keep their vehicles as individual private cars.

However, vehicles used for e-hailing services still need a public service vehicle (PSV) licence, passenger insurance, e-hailing sticker, and e-hailing vehicle permit from Malaysia’s Land Public Transport Agency.

The relaxed rule comes at a time when Malaysia is set to introduce a new e-hailing licensing regime in July, which requires all e-hailing drivers to register for a PSV license and undergo a six-hour training at accredited driving centres.

Going forward, drivers will also need to 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).

“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,” Transport Minister Anthony Loke said at a Grab press conference in April.

While the local transport ministry has taken the step to legalise the ride-hailing industry, there are doubts and concerns over the industry’s readiness for the new licensing regime.

Will the new policy make it difficult for ride-hailing companies to continue their strategy of slashing their fares to acquire and maintain customers, or is the ‘relaxed rule’ enough to provide the sunrise sector the leeway that it is looking for? That, of course, time will tell.

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