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Thinktank: Gov’t regulations for e-hailing and taxi services may cause increase in prices

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The government should relax its regulations on both e-hailing ride services and traditional taxi services to better benefit Malaysian consumers, says thinktank Ideas.

In a policy paper published today, while it generally welcomed the government's approach of regulation instead of an outright ban on e-hailing ride services, the thinktank warned that this may increase prices of such services.

"The paper warns that the proposed regulations will create significant new costs and barriers both for e-hailing operators and drivers.

"The result will be a significant drop in drivers and less competition and innovation from new firms.

"Ultimately this will mean worse outcomes for Malaysian consumers, including less choice and potential higher prices," said Ideas external relations senior executive Amir Ridzuan Jamaludin in a statement today.

Ideas chief executive officer Ali Salman said fair regulations are necessary to ensure safety and clarify the legal status of these new e-hailing services.

"However, the proposed regulations go too far in imposing new costs and barriers for e-hailing operators and drivers.

"The government should reduce the burden of regulations for e-hailing services and also for traditional taxi services which have been heavily regulated for too long," Ali said.

Amir said that this policy paper was presented at a roundtable discussion which was attended by stakeholders in the industry and the government and a report on the roundtable discussion as well as the paper will be submitted to the Transport Ministry.

While there was a general agreement during the roundtable discussion that regulations are necessary to ensure safety and fair competition, he said the stakeholders disagreed on how far regulations should go.

Ideas recommends the government take this opportunity for a "blank slate" approach which is to reform the regulations for both services to make them more competitive.

"Specifically, the government should ease the burden on drivers, reduce the costs of licences, avoid controlling prices and liberalise the overall supply of drivers," Amir said.

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