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Malaysian authorities lift two ride-hailing rules but sector remains heavily regulated

Written by Zhixin Tan Published on   2 mins read

Malaysia expects driver shortages once ride-hailing rules go into effect in July

Two Malaysian authorities, the Ministry of Transportation and the Road Transport Department (JPJ) jointly lifted two regulations affecting the ride-hailing industry in response to complaints and demands from local drivers.

Previously, vehicles registered as private vehicles were not allowed to be used for commercial purposes, as stipulated in the Road Transport Act (APJ 1987). It was mandatory for all prospective e-hailing drivers to convert their vehicles from a private vehicle use code to an e-hailing use code at the JPJ.

This rule has now been lifted, local publication The Star reports, as a result of an influx of complaints, mostly from Grab.

The second lifted regulation concerns tinted glass, which is especially useful for blocking out sun and heat. Previously, rear car windows had to allow at least 30% of light through but under the new rule, motorists in Malaysia can tint their rear windshields and passenger windows as dark as they want,  The Star says in a separate article. The new regulation comes into effect on May 8 and also applies to vehicles used for e-hailing purposes.

Yet, removing the two barriers mentioned above does not make it significantly easier or more convenient for prospective ride-hailing drivers to drive for the various companies. The Malaysian ride-hailing industry remains heavily regulated.

To qualify as an e-hailing driver, on top of the regular background scan and medical checkup, individuals still need to have a Public Service Vehicle (PSV) licence (which is different from the car use code), passenger insurance, a visible sticker on the vehicle indicating that it’s being used for ride-hailing, and an e-hailing permit (EVP) from the Land Public Transport Agency (APAD). The estimated cost required to meet all the requirements is RM800 (USD 192).

In Malaysia, e-hailing is known as a “part time industry” with part-time drivers accounting for 75% of all drivers. It is unsurprising stringent regulations lead to pushback. Ride-hailing companies foresee between 20-50% of the drivers quitting the industry before the remaining rules come into effect in July. This might lead to a driver shortage, which means prices will go up.


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