September 29, 2022

Get one thing right first

4 min read

ON Oct 12, e-hailing regulations became effective. Under the regulations, e-hailing drivers are required to undergo medical check-ups, sit for the public service vehicle (PSV) licence test, send cars that are more than three years old to be checked at Puspakom, and purchase e-hailing insurance protection.These requirements are necessary to ensure that the e-hailing industry is safe for users and free from unfit drivers and unsafe cars.

However, in the early stages of implementing the regulations, several issues cropped up. Some drivers were unable to renew their road tax due to errors in document submission. Some drivers complained that the PSV test was too difficult to pass. Some also complained that they could not sit for the test because the dates they wanted were unavailable.

As a result, users experienced difficulty in booking rides on the first day regulations were implemented because of the lower than usual number of drivers on the road. The shortage of drivers has resulted in inflated fares with users sometimes finding that trips now cost more than double.

Even until now, the shortage of drivers has not been fully resolved and e-hailing fares nowadays are slightly more expensive than they were before.

Notwithstanding these hiccups, the government has decided to pilot test bike-hailing services for six months beginning in January. As the Transport Minister clearly announced at the Dewan Rakyat that bike-hailing will be regulated on par with e-hailing, one can only presume that the implementation of bike-hailing will face the same predicament as e-hailing.

Has the government come up with a robust strategy to ensure that the issues will not occur again?

Given that the pilot run will begin in less than two months and no operators have applied for it yet, the government must seriously rethink its decision to rush this through. Even if this is only a pilot run, the rakyat will expect the government to put in place a proper mechanism to ensure that the experiment will not compromise the safety of users.

The failure to ensure a reliable and safe bike-hailing service will also impede one of the main objectives of bike-hailing, which is to improve the first and last mile connectivity. Exorbitant costs, rider shortage and compromised safety leading to accidents will only undermine the government’s effort to achieve that connectivity.

Apart from the above, the government must also consider the social aspect of bike-hailing. For example, our conservative culture of gender segregation especially among Malay Muslims may require bike-hailing services to provide a gender filter for users’ convenience; ie, users can choose between female and male riders.

This may, however, encounter further problems. Firstly, the gender filter will reduce the number of potential users that one particular rider could serve. Instead of being able to ferry 100 passengers, the potential passengers are now divided into male and female, with the rider likely serving passengers of the same gender only. The reduced potential users and revenue will make bike-hailing less attractive to riders, compared with food or parcel delivery.

Given the fact that 63% of deaths in road accidents involve motorcyclists, the government must not be hasty in deciding to allow bike-hailing services to operate in Malaysia.

In connection with that, the proposed geofencing requirement which will limit the area of service for bike-hailing within a city only is a good initiative, however the boundary must be set after properly taking into account several considerations. As motorcycles are usually the smallest vehicles on the road, accidents involving motorcycles can be due to many factors such as speed, road conditions, carelessness of other road users, visibility and weather. The presence of a pillion passenger will also increase the risk of accident due to the additional weight that affects the motorcycle’s braking distance and control.

Therefore, the rules and regulations surrounding bike-hailing services must be developed based on a vast amount of data without jeopardising an actual person used as a guinea pig.

One of the existing avenues to collect such data is from the existing bike-based services such as GrabFood, Foodpanda, LEL Express, BungkusIT, Lalamove, Happy Fresh and many more. The data from their past and future routes will be of great value to the government in coming up with the right policy for bike-hailing services without having to use actual humans for test piloting.

In addition, as the regulations for car e-hailing have only been implemented recently, the government should take the time to observe and monitor how the regulations change and impact the industry first. Then, the lessons from regulating car e-hailing services will give the government insight into regulating bike-hailing appropriately without adverse unintended consequences.

Another point worth highlighting is the untapped potential of the existing e-hailing industry.

According to the Land Public Transport Agency, 42 companies have obtained the licence to operate e-hailing services in Malaysia. Looking at the list, only three names sound familiar: Grab, MyCar and Mula. The remaining 39 e-hailing applications are either unknown (eg Firstone, Dacsee, Cioaz) or not known to be operating an e-hailing business (eg Tune Travel). With Grab controlling a big chunk of the e-hailing market in Malaysia, the government may be interested in encouraging other licenced e-hailing operators to up their game and offer more alternative to the consumers.

Also, as some of these companies are local and home-grown, the government should be providing more assistance to them to compete so that Malaysia can move away from being a mere consumer of the gig economy and start to become one of the key players, bringing value to the rakyat.


CEO, Institute for R&D of Policy (IRDP)