[UPDATED] E-hailing operators can set their own fares, no govt regulation: Wee

KUALA LUMPUR – Despite overwhelming public grievances, e-hailing fares remain unregulated as the Transport Ministry attributes the surge in price to supply-and-demand imbalance and high traffic volume.

Minister Datuk Seri Wee Ka Siong said the government does not regulate the base fare and the surcharge cannot be more than two times the base fare, taking into account peak rates and fuel prices.

“The e-hailing operators are permitted to set their fare structures based on their own formulae and their terms of service with their consumers in a free market.”

He added that supply-demand and high traffic volume have the most effect on the fare algorithms employed by the e-hailing operators.

“(These) account for many factors including distance, traffic volume, weather patterns, as well as market supply and demand. They all play a part in the increase in fares lately,” he said in a statement today.

He added that the attributing factors are compounded by some e-hailing companies that saw their number of registered drivers drop by some 30% compared to pre-pandemic times – resulting in longer than expected wait times for certain locations.

“More than 130,000 individuals hold vocational licences to work as e-hailing drivers. This group is expected to grow as more driving schools and operators receive more candidates to become drivers.

“We will continue to monitor the e-hailing industry to ensure fairness and prevent undue burden on consumers.”

So far, there are 21 e-hailing operators with active licences nationwide, including the Klang Valley.

This comes after the ministry and the Land Public Transport Agency (LPTA) met the e-hailing operator involved in the fare surge recently.

“The operator concerned has also assured the ministry of allocating more resources towards increasing the number of drivers currently available.”

The service fare was reported to have increased up to 400% during peak hours, triggering dissatisfaction among consumers and some other parties. They also called for government intervention, among others, in relation to price regulation.

Meanwhile, checks done by The Vibes showed that Grab e-hailing charges were significantly higher than other less popular ride-sharing services.

For example, a ride from Menara BRDB in Bangsar to KL Sentral at 1.30pm on Thursday was priced at RM20.30, while another app MyCar charged slightly less at RM16.

Another trip from Menara BRDB to the Kuala Lumpur court complex was RM25.30 on Grab, while MyCar only charged RM15. On the other hand, airasia ride set the trips to both locations at RM11 and RM12 respectively, offering the lowest fares compared with Grab or MyCar.

An industry insider suggested that newer services such as MyCar and airasia ride could be subsidising the fares to drive up their number of users.

“Grab had done this when it first started out in the past, offering discounts to customers to encourage uptake on the app. But now the industry is more regulated and operating costs have increased.

“The economy has also reopened and many drivers have moved on from the gig economy to regular jobs.” – The Vibes, May 24, 2022