One step forward, two steps back

Regulating e-hailing is fine, but why transpose a system meant for traditional taxis to innovative ride providers?

THE Public Service Vehicle (PSV) licence scheme is just a week old and it is already causing headaches for e-haling companies and drivers. Soon, it would become a heartache for e-hailing customers. Introduced on April Fool’s Day (one cannot escape the irony of it), the PSV is perhaps the most discussed topic in the last few days. The New Straits Times had carried two news stories with screaming headlines in just two days: “Warnings of Chaos, Skyhigh Fares” and “Drivers Quit Over E-hailing Ruling”. We are all for regulation, though not over regulation. All professions have it and we don’t see any reason for drivers not to. But to do it in fits and starts does nobody any good.

Laurence Todd, Director of Research and Development at the Institute for Democracy and Economic Affairs (Ideas), is even more damning. Overall, he says, PSV is a flawed approach because it transposes a system meant for the brick-and-mortar world of traditional taxis to the innovative e-hailing space. They operate in two different worlds. Taxi drivers are full-time, while e-hailing drivers are mostly part-time workers. There are 300,000 e-hailing drivers, of whom 75 per cent are part-timers. Grab has 200,000 drivers, 50 per cent of whom are from the Bottom 40 per cent income group (B40). Todd expects between 30 per cent and 40 per cent of e-haling drivers to drop out with the introduction of PSV. If his hunch is right, then PSV is making Malaysia’s already high

We are all for regulation, though not over regulation.

underemployment worse.

PSV has all the makings of a system that was not fully thought through. Consider the cost to the e-hailing drivers. There is the RM200 for training, expenses for medical examination and other associated costs, which are expected to bring the total up to RM1,000. For those in the B40 group, this will create a hole in their pockets. Then there is the opportunity cost to the drivers as they are expected to spend at least 20 hours away from earning an income, chasing the many approvals. All said, PSV is not made for the e-hailing world.

Is there a way out of this mess? Todd has some ideas: have a moratorium for six months, which is enough time to review and reflect on the reality of the part-time employment world. Malaysia’s taxi industry model isn’t the right one to emulate. Neither is the training to be conducted by some 200 driving schools. The Transport Ministry (MoT) must be advised to look for the devil in the PSV details. MoT has done one thing right though: not banning e-hailing services.

The e-hailing industry is not just about providing employment to B40 drivers; it has a critical multiplier effect on the economy as a whole. It has changed the labour market, too. Employment is no longer a nine-to-five job for e-hailing drivers, especially for many from the Middle 40 income group and millennials. Thanks to the industry, many are growing their businesses by leaps and bounds. MoT may do well not to put too many hurdles in the path of the e-hailing industry.