Malaysiakini Letter

E-hailing and taxi services progressing in the right direction

YS Chan  |  Published:  |  Modified:

On July 27, the Dewan Rakyat passed amendments to the Land Public Transport Act 2010 and the Commercial Vehicles Licensing Board Act 1987. They are scheduled to be gazetted by October for implementation nationwide.

On Aug 1, Land Public Transport Commission (Spad) chief executive officer Mohd Azharuddin Mat Sah held a press conference on the Land Public Transport Act (Amendment) Bill 2017.

He started the briefing on the Taxi Industry Transformation Programme (TITP) that was unveiled on Aug 16 last year, and said the 11 programmes are on track.

The first was to regulate e-hailing as an intermediary service. Azharuddin spelt out the definitions and criteria for e-hailing operators, vehicles and drivers.

Many people are not aware that e-hailing included taxi apps such as EzCab, and not just Uber and Grab. All e-hailing operators are required to be locally incorporated, and their vehicles and drivers in Peninsula Malaysia must be registered with Spad.

The insurance must cover driver, passenger, vehicle and third party. This seemingly innocuous sentence has wide implications.

Under the Road Transport Act 1987, all motor vehicles must be insured for legal liability for death or bodily injury to third parties, and this is incorporated in all motor insurance policies.

However, the cover could be null and void if the vehicle was driven under the influence of drugs or alcohol, or a private vehicle is used for hire or reward, such as carrying fare-paying passengers.

As such, terms and conditions of motor insurance policies for private vehicles must be amended, and premiums adjusted if necessary, when they are used for e-hailing services.

Under the old Motor Tariff, the premium for private vehicles was only RM26 for every RM1,000 under comprehensive insurance, but RM69.80 for painted taxis (metered and non-metered), and RM102.50 for limousine taxis.

Insurance cover for painted taxis includes legal liability to passengers. To insure four passengers in a limousine taxi under similar cover, the additional premium was RM78.

As for taxi and e-hailing drivers, they would be covered under the Self-Employment Social Security Act 2017, which was enforced in June. It is compulsory for them to be registered by end of the year, but they will have to pay between RM157.20 and RM592.80 annually.

If comprehensive insurance is made mandatory, many taxi drivers would be in a bind as nearly all have opted for much cheaper third party covers, with the major portion of the risk borne initially by taxi companies until it is shifted to the driver after much of the vehicle loan has been paid.

Issuance of individual permits

The second programme listed under TITP was issuance of individual permits and cash grant for drivers exiting rental-purchase agreements with taxi companies.

On June 21, 157 metered taxi drivers and 143 non-metered taxi drivers received individual taxi permits, with 43 receiving RM5,000 each for the purchase of a new taxi. Since last September, Spad has received 3,474 taxi permit applications and approved 1,722.

Since inception in 2010, Spad had not issued any new permits to taxi companies and this was recently confirmed by Nancy Shukri, when replying to a question in Parliament recently.

But many people continue to harp on the large number of permits obtained by some taxi companies from the Commercial Vehicle Licensing Board, which ceased to function in Peninsula Malaysia about seven years ago.

The third programme was to liberalise vehicle model for taxis, allowing all vehicle brands and models that achieved a minimum 3-Star safety rating under the Asean New Car Assessment Programme to be used.

This move was also in line with small and affordable models, such as the 4-Star Perodua Axia, being used for e-hailing services. But new taxis of various models are not seen on the road. Is the Road Transport Department (RTD) holding up their registration and inspection?

The fourth programme was to standardise the terms and conditions of rental-purchase agreements between taxi companies and drivers. Half a century ago, the Hire Purchase Act 1967 was passed in Parliament and hire-purchase agreements were standardised.

The fifth programme was to introduce mandatory KPIs for taxi operators. This imposition is certain to upgrade professionalism of taxi companies and drivers but would surely be the death knell for weaker operators and cabbies.

The sixth programme was to impose stringent pre-screening processes on drivers, including health checks, criminal records, traffic offences and violations of SPADs operating licence conditions.

But it would be difficult to filter out those with mental health issues. The National Health Morbidity Survey 2015 by the Health Ministry revealed that 4.2 million out of 14.4 million Malaysians aged 16 and above suffered from mental issues, or over 34 percent.

Use of a merit and demerit system

The prevalence in Kuala Lumpur was higher at 40 percent, and that was for ordinary folk. It would be no surprise the percentage was much higher for taxi drivers, given that many refused to use the meter and were aggressive towards passengers, e-hailing drivers and enforcement authorities.

The seventh programme was to use a merit and demerit system to increase service standards by working closely with RTD to include a full list of offences for taxi drivers under the Kejara Demerit Points System.

The eight programme was to rationalise metered fare structure. The same metered rate would be applicable for all new Teksi 1Malaysia (TEKS1M) and budget taxis. Existing TEKS1M drivers are given the option to migrate or remain with higher fares.

The ninth programme was to rationalise zonal fare using distance-based calculation to ensure consistency and fairness for both taxi drivers and passengers at terminals and airports.

The tenth programme was to allow for dynamic fare for metered taxis providing e-hailing services. While they can continue to collect higher regulated fares as clocked by the meter from street-hailing passengers, taxi drivers may also participate in e-hailing and accept lower fares to run more trips.

The eleventh programme was to implement mandatory training for taxi drivers, which include orientation, entrepreneurship, safety, vehicle maintenance and customer service.

Azaharuddin announced that vehicles to be used for e-hailing services must be lesser than five years from date of registration with RTD, with seating capacity for up to 10 passengers.

These vehicles must be sent for inspections at Puspakom upon reaching their third and fourth year. Taxi drivers too no longer need to send their vehicles for inspections every six months but annually after three years.

E-hailing drivers too are required to have a digital Driver’s Card issued by Spad after they have been certified fit and attended customer service training, in addition to possessing a valid driving licence and free from summonses and criminal record.

Malaysia made history with the passing of the Land Public Transport Act (Amendment) Bill 2017, as it was the first country to legalise e-hailing services. E-hailing operators are now obligated to obtain Intermediate Business Licence from Spad in order to operate legally.

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