As the e-hailing service is set to be regulated, the government is likewise expected to offer incentives for taxi drivers who plan to exit the pajak (rental) system.

Land Public Transport Commission (SPAD) chairperson Syed Hamid Albar in a press conference today said qualified taxi drivers will be issued individual taxi licences under the metered taxi class and hire cars.

Those planning to exit the pajak system will therefore receive a cash grant amounting to RM5,000 from the government to purchase a new vehicle.

Applicants, however, must be free from criminal records and must not be bankrupts.

With registration set to commence on Sept 1, SPAD is also looking to impose stringent pre-screening processes on both e-hailing and taxi drivers.

This includes health checks, criminal records, traffic offences and violations of SPAD’s operating licence conditions.

SPAD chief executive officer Mohd Azharuddin Mat Sah explained that taxi drivers are normally stuck in the pajak system as they are expected to pay monthly instalments for their vehicles.

“After the term ends, they can sell off the car but then they are without a licence.

“In this case, they are entitled to individual licences,” he said.

Previously, it was reported that Uber and Grabcar services would be legalised following regulation to the e-hailing taxi concept.

Amendments to the laws to allow ride-sharing are expected to be tabled during the Parliament sitting in November.

Dynamic fare structure

Meanwhile, under the approved Taxi Industry Transformation Programme (TITP) which comprises 11 programmes, metered taxi drivers providing e-hailing services will also be given the choice to opt for either the meter-for-street hails or the e-hailing fare.

“It's not that we are giving favour to e-hailing companies,” said Syed Hamid.

“We want to be able to have a dynamic fare structure (so) taxi drivers have the option to choose.”

Although all 11 proposals have been approved by the government, Syed Hamid said not all of them could be implemented immediately.

“Some require changes of the laws, rules and regulations,” he said.

For example, regulating e-hailing as an intermediary service under the Land Public Transport Act would require that the act first be amended.

Once passed in Parliament, companies offering e-hailing services must be incorporated in Malaysia and all e-hailing drivers will be required to have a drivers’ card issued by SPAD.

Vehicles that provide e-hailing services, on the other hand, will be required to comply with roadworthiness inspections.

Meanwhile, Syed Hamid also confirmed that vehicle models for taxis will be liberalised to provide wider options for taxi licence holders.

All vehicle brands and models which achieve a three-star safety rating under the Asean New Car Assessment Programme (NCAP) will be approved, he said.