Riding with the times
Both e-hailing and taxi services can co-exist.
INNOVATION is a tricky business. It is a disruption to the norm. On the one hand, it offers opportunity and development. On the other, it may cause some to be left behind.
One innovation that has impacted and disrupted Malaysia’s urban public transport system, especially the taxi industry, is the e-hailing system. While the public has shown clear demand for e-hailing solutions, the taxi industry has expressed concerns about the entry of e-hailing players.
With e-hailing laws expected to be passed in Parliament this month, I would like to take this opportunity to explain how e-hailing services fit into our Taxi Industry Transformation Plan (TITP) and more importantly, how we can all benefit from it.
Instead of seeing the e-hailing companies as the new “taxi industry”, I prefer to look at it in a way where both services can co-exist. Each has its own goals and the TITP seeks to bring them all together. For starters, let’s look at the taxi drivers.
Although I am fully aware of the concerns of taxi drivers in terms of e-hailing services, the Government is mindful that a complete ban of e-hailing companies would not solve the fundamental issues faced by the “mainstream” taxi industry.
For decades, most taxi drivers in the country have been operating under the “pajak” (rent-purchase agreement) system, with a substantial part of their revenue paying the rental fee.
The TITP will grant qualified taxi drivers cash support of up to RM5,000, allowing them to break out of the “pajak” contracts. This means that taxi drivers are now able to become their own boss and have a proper footing, levelling the playing field among the taxi industry and e-hailing services.
The next step is to improve taxi drivers’ overall service quality with a stringent pre-screening process and allowing more car models to help drivers to reduce their cost.
Taxi drivers will no longer be limited to only driving cars with the engine size of 1.5-litre, but will now also be able to drive those with a minimum 3-star safety rating under the Asean New Car Assessment Programme.
The TITP will also enforce KPIs for taxi operators. This means taxi companies will be expected to operate beyond their normal business of connecting taxi users to taxis on the road, and will also be responsible for the taxi drivers’ overall performance, car quality and condition.
With these upcoming changes, I strongly urge the taxi industry to embrace the TITP and see it as a critical component of their business. This is because, contrary to popular belief, there is still a large number of users who prefer taxi services! But users demand quality service! We have to fulfil these important criteria of the business.
A recent study by PricewaterhouseCoopers (PwC) showed that 52% of taxi users use e-hailing applications to get taxis. In contrast, only 14% of taxi drivers are using e-hailing applications to get customers. This highlights there is still a substantial demand for taxis. All it takes is for taxi drivers to take the initiative and adapt to the current demand.
As Jack Ma, founder of one of the biggest e-commerce companies in the world, Alibaba Group, and also Malaysia’s digital economy adviser, has said, it is not technology that disrupts business, but one’s uncertainty about the future and refusal to adapt. These days, e-commerce, which includes e-hailing, is “business as usual” for most companies. With this in mind, even the taxi industry must learn to embrace e-commerce and e-hailing.
The goal of the TITP is to push the taxi industry in the right direction, ensuring it is resilient and competitive against the landscape of a rapidly evolving market. I am hopeful that by embracing the TITP and enabling the e-hailing ecosystem, we are keeping with the times and paving the way for positive out- comes for the entire taxi industry.
For e-hailing drivers, the TITP is all about providing a safe, secure working environment and allowing them to provide better, enhanced service to their customers.
E-hailing companies and their drivers must follow regulatory requirements similar to what is imposed on all taxi companies and drivers, including providing insurance for passengers and drivers. This must be enforced with no exception.
Lastly, for the end users, the TITP will make sure all the “what-ifs” and concerns are minimised as much as possible, providing all a safe and sound environment when taking any form of taxi or e-hailing services.
The TITP is also designed to address a growing problem in our urban areas – traffic congestion and connectivity of public transport, known as first-and-last-mile connectivity where commuters can seamlessly travel between their homes, the respective public transport hubs and their destinations.
While the Government continues to build capacity and infrastructure for urban public transport in line with the National Land Public Transport Master Plan, there is still a demand lag for public transportation.
The TITP will, hopefully, serve as a first step in encouraging more Malaysians to take up public transportation and thus, reduce traffic congestion. E-hailing will also help to address the need for better firstand-last-mile connectivity. This means it will be easier for users to head to the nearest station through an Uber, Grab or taxi ride.
This is proven in the aforementioned PwC research, which also revealed that 59% of e-hailing application users have never hailed a taxi before this. This shows that these e-hailing applications can attract more people to use public transport, simply because of their convenience.
As we move closer to the goal of being a developed country, it is necessary that the public transportation network becomes more integrated, convenient and accessible. I am confident that the TITP will help drive up Malaysians’ use of public transportation to 40% by 2030, as envisioned in the National Land Public Transport Master Plan and the National Transformation Programme.
As I’ve said at the beginning of this article, innovation is a tricky business. It will get trickier if we allow technology to get ahead of us, without us embracing and applying it.