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Car-sharing startups may be illegal in Malaysia

LETTER | Several questions come to mind regarding foreign car-sharing startups which have recently launched their business operations in Malaysia.

On Jan 23, the website was officially launched, starting with a fleet of 240 vehicles in the Klang Valley. The hourly rates are from RM8 for Perodua Axia, RM9.90 for Honda City, RM18.90 for Honda HR-V and RM25 for Mini Cooper are certain to give traditional car rental companies a run for the money.

After reading a report, I checked the local website for the company. There were more than 4,605 words to provide comprehensive information on renting these self-drive cars using mobile phones, but none confirming that drivers would be insured for third-party injuries, which is required by law.

There is a claim that startups such as these are licensed by the Ministry of Tourism and Culture, which is depicted by an official logo of the ministry.

But car rental service is licensed by the Land Public Transport Commission (Spad) in Peninsular Malaysia. Although the vehicles could be rented without going through a human intermediary, the service remains the same.

As such, these vehicles must be licensed under ‘Hire & Drive’ unless exemptions are granted by Spad in Peninsular Malaysia, and Motac in Sabah and Sarawak. But if this is the case, Spad and Motac would have notified existing car rental operators of the option of operating without permits.

It is more likely that such enterprises have started operations illegally in the country. But more importantly, drivers are not covered for third-party injuries and may have to pay out huge compensations for injuring others while driving cars from these companies.

It is clearly stated in the motor insurance policy of all vehicles under private registration that they cannot be used for hire or reward.

Editor's Note - Below is a response from Socar Malaysia received at 8pm today:

Socar Malaysia, that is ushering in a car-sharing community to increase utilisation of vehicles in Kuala Lumpur and to bridge the gap in the multi-flex transportation system, is a company operating in Malaysia licensed by Motac. All the vehicles on this platform possess a 'Hire and Drive' permit issued by The Land Public Transport Commission (Spad).

The company that works closely with Jabatan Pengangkutan Jalan (JPJ), also provides additional personal accident coverages up to RM50,000 for their members and full comprehensive insurance to the driver in case of vehicle theft or damage, putting the safety of their members as first priority.

Socar Malaysia hopes more Malaysians can enjoy the benefits of car sharing and be empowered to go carless, utilizing their resources to achieve fruitful goals.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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