Longer wait times, pricier e-hailing rides expected

E-hailing regulations take effect 12 July

New e-hailing regulations come in to effect today, 12 July 2019. Although the regulations were mandated last year, the application process for the vocational Public Service Vehicle (PSV) licenses only kickstarted in April this year. Racing against time, e-hailing operators (EHOs) have been scrambling to get the estimated 200,000 driver-partners licensed. To date, only 10 percent have obtained PSV licenses and this is expected to greatly impact passengers, EHOs and businesses.

Grab Malaysia, in an official statement on Tuesday said that each day, its driver-partners serve over one million ride bookings. On average, a passenger can get his or her ride within six minutes. However, this may take a drastic turn post-12 July.

It is reported that unlicensed drivers will be locked out of e-hailing operator systems and therefore will not be able to accept any ride bookings.

With anticipated reduction of active drivers on the road, it will be inadequate to serve the ever-increasing demand of ride-hailing.

Consumers will feel the pinch of longer waiting times especially during peak hours and rainy days. 

These challenging times affect not only Grab but the e-hailing industry as a whole including the likes of EZcab, Dacsee and MyCar.

Transport minister Anthony Loke on Tuesday said the ministry will not extend the deadline; drivers can still continue to apply for the PSV license post-12 July. He will be tabling the outcome of the policy to the Cabinet today. Responding to speculations, he said that the Government has no plans to regulate fares of e-hailing rides. 

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Some e-hailing drivers had expected the Government to u-turn on its decision on the new e-hailing regulations. This looks to be unlikely.

Last month, the government gave the approval for e-hailing operators to develop and run online e-PSV training to hasten the application process. According to Grab, the digital training initiative attracted almost 20 percent of its drivers to complete their e-PSV training within just four weeks. Some are currently awaiting for their examination results in order to obtain the license, while others are awaiting their turn to take the examinations.

The leading e-hailing operator continues to work closely with the Ministry of Transport (MoT), Road Transport Department (JPJ), Land Transport Agency (APAD), and PUSPAKOM to assist drivers, including co-organising mass examinations.

With many scrambling at the last minute, there is understandably a waiting period to take the test, as well as to receive results.

As of 2 July, around 62 per cent of applicants between April and June have obtained the licence. Out of 16,638 applicants who sat for the licence application theory test, 10,151 passed the test.

While the time factor, or lack of, is what’s causing this hoopla, PSV license-related costs is both a concern and detriment to drivers who wish to “legalise.”

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The cost to obtain driver regulatory compliance is MYR220, and this includes a compulsory 6-hour training course and the PSV license proper. However, there are also other costs involved including driver insurance, car inspection, medical checkup and an E-hailing Vehicle Permit (EVP). 

EHOs have taken steps to absorb some of the regulatory compliance costs to reduce the burden on drivers. Grab, for instance, subsidises 70 percent of total regulatory compliance costs which includes an industry-first flexi e-hailing driver insurance (MYR1 per day or MYR400 per year) which it developed.

The months ahead will be challenging for the industry, and particularly for passengers. With an expected imbalance in supply and demand, it is advisable for passengers to properly pre-plan their travel during this transient time. Book a ride earlier than usual and try not to ride during peak hours (7-9AM and 5-8PM).

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