Can private cars be used for taxi services?

POSTED BY CBT Team ON 14 August 2014


The Uber app connects fare-paying passengers to private car drivers and their smartphones are also used to compute the fares using GPS technology without the need of a taximeter.

This innovative chauffeur-driven service was first launched in California in 2010. Since then, it had taken the world by storm.

The premium service UberBlack was officially launched in Kuala Lumpur on Jan 8 this year and the low-cost UberX on Aug 7.

UberBlack is now having a promotion with starting fare at RM2, RM18.00 per hour, 65 sen per km with the minimum fare at RM5. The rates for UberX are RM1.50, RM12, 55 sen and RM2.50 respectively.

On top of that, Uber do not charge an additional 50% between midnight and 6am which taximeters are programmed to register.

Such attractive fares are bound to benefit smartphone-savvy passengers with credit card accounts. The service is cashless and much cheaper than taxis.

Many passengers welcome Uber as godsend, particularly those who had been ripped off by unscrupulous cabbies or stranded without taxis.

But it is also wreaking havoc to existing industry players as they see Uber’s marketing strategy rather ruthless by undermining existing taxi operators and undercutting cabbies.

Never in the history of the local taxi industry has it experienced such a shakeup which could cause the collapse of taxi companies and demise of traditional cabbies.

Until the Land Public Transport Commission (SPAD) announces new taxi fares, the rates for executive taxis are RM6 starting fare, RM34.28 per hour and RM2 per km.

Budget taxi fares are RM3, RM17.14 per hour and 87 sen per km respectively, since 2009.

As all new metered taxis will be using the Proton Exora model, a fair rate for both drivers and passengers would be RM24 per hour and RM1.25 per km.

The introductory offer of RM12 per hour and 55 sen per km by UberX using petrol-driven Perodua Myvi, Nissan Almera or Toyota Vios will capture initial customers but not sustainable.

Also, these private vehicles can be confiscated by SPAD or the Road Transport Department (RTD) as under local laws, all vehicles used for carrying fare-paying passengers must be licensed.

Over the past decades, private cars used as pirate taxis and private vans ferrying fare-paying passengers have been impounded by RTD.

In the late 1960s, several car rental companies offering self-drive cars requested the Registrar and Inspector of Motor Vehicles to introduce limousine taxi licences.

Limousine taxis look the same as private cars as there are no taxi number plates or markings, and they cannot be hired without a chauffeur.

It was only recently that white number plates with black letterings were fitted on new limousine taxis but without metered taxi registration numbers starting with H.

Self-drive rental cars were available locally from 1963 and licensed under “Hire and Drive”. They were meant to be driven by customers only.

However, when the Tourism Ministry took over the licensing of Hire and Drive, it allowed these vehicles to be used for chauffeur-drive as the Commercial Vehicle Licensing Board retained control over the issuance of limousine taxi permits.

Until SPAD disallows Hire and Drive vehicles to be used for chauffeur-drive, car rental companies can continue to use them for such service provided they are insured for additional “Passenger Risk” cover.

Car rental companies are also happy to rent out to drivers who use the vehicles to provide chauffeur-driven service.

As for Uber, it is not a transport company and does not need the Operator Licence from SPAD, which all local public transport companies require.

Uber vehicles are without taxi markings. They could be limousine taxis, Hire & Drive vehicles or private cars, with or without the mandatory passenger insurance for public service vehicles.

If left unchecked, some taxi drivers deprived of their livelihood might take the law into their own hands and the safety of Uber drivers and passengers could be at risk.

Uber has triggered upheavals in the taxi industry and banned in many countries. But if its service is deemed legal locally, then it should be allowed to operate without hindrance.

An early pronouncement by SPAD would be welcomed by all parties.

YS Chan
Kuala Lumpur


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