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08 July 2017

SPAD's Proposed Law for Cab Hailing Companies

Cab Hailing Companies are Hot Right Now.

If you live in Kuala Lumpur, or one of the other major cities, you would no doubt have heard, or even used, a cab hailing app like Grab or Uber. They are also known as "e-hailing services". 

Grab and Uber are popular e-hailing apps in Malaysia


When they first started in Malaysia, it sparked a trend for car owners who needed extra income to drive for one of the two companies. Uber is US-based, while Grab is homegrown. (Founder Anthony Tan's grandfather apparently founded Tan Chong Motors.) 

As their popularity began to increase, taxi drivers protested, because they were being deprived of business. They held protests and press conferences. One spokesman even announced that he would vote against BN if Grab and Uber were allowed to operate.

But the apps were allowed to operate, seemingly for the benefit of the masses. While using the apps to hail a cab driver, you could see the prices indicated, a huge plus for passengers who never knew how much they would be forced to pay. The apps provides the driver's name, telephone number and vehicle number plate, also another plus point. Most people would not have these details, especially necessary for police reports.

Recently, Grab and Uber have been hit with bad news.

Some people might say that it was bound to happen, sooner or later. In this case, a number of untoward incidents cropped up this year, linked to Grab and Uber. 

In June 2017, a Grab passenger claimed that she was raped by the Grab driver. She had been drunk, and was unable to fend off his advances. He later drove her home.

Contrast this with January 2017, when a lady driver for Grab was molested by her Pakistani passenger. Apparently, he continued to send her lewd messages and photos of his privates even after the incident.

In June 2017 as well, an Uber driver was nabbed by the cops for molesting his Vietnamese passenger. She told her Malaysian husband about it, and he, with a group of friends, went out on a hunt for the Uber driver. Strangely enough, the Vietnamese lady was also remanded by the PDRM (police) as few days after the incident.

In May 2017, an Uber driver robbed a pregnant lady passenger. He was aided in the crime by an unidentified man. He then dropped her off at Puchong.

And so it seems, there are various crimes that have been committed, by rogue Grab and Uber drivers, and against these drivers as well.

This is probably why the Government is mooting the proposed law to license Grab and Uber (and other ride hailing companies).


Changes in laws sometimes confuse people.

Proposed Amendments to the Land Transport Act 2010


You can view the proposed amendments here (from the Malaysian Parliament website). The text of the proposed amendments is in Bahasa Malaysia.

With the proposed amendments, cab hailing companies or ride hailing companies or e-hailing companies as they may be called, will need to be licensed. These companies are called "perniagaan perantaraan", which can be translated to "facilitation services" or "middleman services".

 “perniagaan pengantaraan” ertinya perniagaan yang memudahkan perkiraan, penempahan atau transaksi bagi penyediaan perkhidmatan pengangkutan awam darat yang dinyatakan dalam Jadual Ketiga sama ada untuk apa-apa balasan berharga atau nilaian wang atau selainnya;’;

Translation: The "perniagaan perantaraan" means any business that facilitates the calculation, booking, or transaction for preparation of public land transportation stated in the Third Schedule whether for valuable consideration or monetary value or otherwise. 

"Otherwise" could mean points, coupons, or even free. 

The proposed amendments will add a new chapter 2A to the Land Transport Act 2010, to regulate these "perniagaan perantaraan", i.e. e-hailing services such as Grab and Uber.

A proposed new section, section 12A, will cover the licensing portion.

Section 12A(1) will prohibit anyone from running cab hailing services similar to Grab and Uber unless they are able to obtain a licence issued under the Act.

Section 12A(2) will require "perniagaan perantaraan" to apply for a licence and to pay the relevant application fee. The application fee isn't stated in the proposed amendments.

Section 12A(3) will require SPAD to be convinced that the applicant has the monetary capacity to carry on the business. Proof of financial strength must be shown.

Section 12A(4) says that the SPAD commissioner can either approve the application or reject it. He can even choose to approve the application partially instead of fully, and with certain terms and conditions!

Section 12A(5) requires that the lifespan of the licence be stated. Additionally, the commissioner may impose terms and conditions regarding:

a) The type and extent of facilitation that the applicant can run;

b) The level of the service that is required to be provided;

c) Security measures that must be implemented;

d) Standards that must be maintained by the licence holder.

Hmm.... there's a whole bunch of provisions regarding applicants. It covers from section 12A (licensing), 12B (renewal of licence), 12C (application to amend), 12D (cancellation and suspension of licence), 12E (transfer of licence forbidden), 12F (record keeping) and 12G (responsibility to inform SPAD in case of claims against cab hailing company).

Drivers records to be kept: Section 12F.

Under the proposed section 12F, licence holders must keep records of drivers in accordance with section 253(1)(m), of the Land Transport Act 2010.

Section 253(1)(m) of the Land Transport Act 2010 says, 
"The Commission may make rules for ..... to provide for the records to be kept by licensees, licensed operators and drivers of relevant vehicles and railways, the returns to be made and the manner of record-keeping;"
Such rules are good... provided that they can get the genuine information. What if there are fake identifies? Who is to bear the responsibility?

Is it a good thing?

We can see it as a good thing. I once heard a retired politician say that some businesses operate under the radar when they start, but to grow they need to become regulated, legalized. Without regulation, there's uncertainty, and maybe even unreasonable demands from corrupt officers who claim to be able to take action against the industry players. Regulation will give certainty, legalization, and even allow the business to grow.

Here's an example of how it could have gone. In Taiwan, Uber was banned in February this year. The BBC said that Taiwan was "the place Uber couldn't crack." In April, Uber was allowed to return and operate legally, but subject to the following terms: Allowed in Taipei only, and using commercial drivers only.

The new regulations say municipalities can set a price cap on fares charged by ride-hailing app companies and also limit the number of vehicles operating in a district. In addition, drivers must possess a vocational license for public transportation.
In comparison, if the SPAD only wants local ride hailing companies to be licensed and to keep records of drivers, it means that:

a) Ordinary folks can continue to drive for Uber or Grab, and

b) There may not be any limitation in terms of fare and/or geographical scope of services.

So for that reason, Grab and Uber (and indeed, other related companies) should be thankful that the proposed amendments are not too overbearing.


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