Price control needed for e-hailing services

E-HAILING is a great example of how a technological innovation can disrupt an existing market and, in this case, threaten to wipe out the conventional taxi industry while revolutionising the way people commute.

Around the world, taxi operators are demanding regulatory protection against e-hailing services as their livelihood is affected although, on the other hand, consumers are pleased. The situation is no different in Malaysia.

Here, our policymakers are continuing to explore regulatory solutions capable of appeasing all the stakeholders with minimum negative impact on consumers. Unfortunately for consumers, the damage is already done. The market is now dominated by a single player, creating an almost absolute monopoly, even though we are informed that there are 17 other active e-hailing service providers.

Following the Uber-Grab merger, we have seen a dramatic rise in the number of complaints lodged against Grab services, namely price hikes and unsatisfactory service. Apparently, Grab uses some algorithm to calculate the imbalances of supply, demand and traffic condition to set a final price which is unfair to consumers.

In order to protect consumers, the Malaysia Consumers Movement is urging the government to immediately introduce a price control mechanism on e-hailing services. A floor and ceiling price, including a floor cap on the driver’s commission, must be implemented. This would also ensure orderly development of the industry and benefit the drivers.