Addressing the real problem facing the taxi industry in Malaysia

POSTED BY Nigel Andretti ON 25 July 2016


THE real problem facing the taxi industry is that ride hailing apps pioneered by Uber have busted the conventional taxi monopoly in Malaysia and also worldwide.

Referring to the Cabinet proposal by the Land Public Transport Commission to give taxi permits and specifically Teksi1Malaysia to individuals rather than companies or cooperatives, the question that begs to be asked is “Given individual permits, how will this make taxi drivers provide their services during traffic peak hours?”

It’s common practice for many taxi drivers to attend to family chores — fetching their kids to and from school and to fetch their wife from work — during traffic peak hours rather than cruising the streets to provides a service.

Ride hailing apps such as ride-hailing pioneer Uber on the other hand, continually fine tune their incentives so that drivers are motivated to accept ride-hailing during peak hours.

Uber and Grab, its rival in Malaysia, have given the power back to the rider with information such as the approximate fare, the distance and the optimal route based on Waze, the most popular traffic/GPS smartphone app in Malaysia.

On the supply side, drivers seeking new or additional income are flocking to Uber and Grab.

The recruitment process is simple — a car less than seven years old, a smartphone with data package, clean driving license, no criminal record, and ability to converse in English, besides others.

Given such powerful technology where drivers are paired with riders based on proximity, where drivers are provided expert routing knowledge using Waze or Google Maps, and where riders know that they are not being fleeced on fares or by the driver not knowing the way, then any overhaul of the taxi system without providing the conventional taxi driver with an incentivising ride-hailing app doesn’t address the problem nor take advantage of the opportunity provided by ride-hailing apps.

We propose therefore that in addition to cracking open the taxi permit bureaucracy and rental-seeking opportunism, SPAD give its full support to ride hailing apps for taxi drivers, such as the recent 2Go initiative by Datuk Davy Woo and Tengku Hasmadi, an industry veteran in the express bus industry.


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