Uber, Grab will solve taxi woes, but keep licensing to a minimum

QUESTION TIME | Legalising Uber and Grab, current disruptors of the taxi market, is a wise, far-sighted move although the imposition of licensing requirements for vehicle-hailing operators and licences for drivers is not welcome and unless fairly implemented has much room for abuse.

Taxi drivers are likely to lament the passage of the bill currently in Parliament to legalise the vehicle-hailing services at first. Upon reflection, they should welcome it. At long last, the majority of them are freed from the long-suffering, patronage arrangement of working for their licence owners first before what they earn goes into their own pockets. More on that later.

If the government departments concerned such as the Commercial Vehicles Licensing Board (CVLB) and the Land Public Transport Commission or Spad set low fees and do not put bureaucratic and other hurdles for licences, it will see a major overhaul of our taxi system for the better - and the government won’t have to lift a finger to do anything.

The public is already used to the cheaper fares, superior service, better vehicles, more polite and informed drivers, reliability and absolutely no attempt to cheat as among some of the key benefits of using Uber and Grab.

This is indeed a very welcome disruption of the notorious taxi service in Kuala Lumpur for many, many years now rife with rudeness, arrogance, unreliability, exorbitant fares without using meters and often threats. Some of the taxi drivers have even resorted to violence against the drivers - and passengers - of the vehicle-hailing services.

In that respect, it is great to learn that the proposed legislation even includes amendments to the Land Public Transport Act to deter such incidents. A proposed amendment to Section 200 of the Act punishes those who assault, hinder or obstruct intermediate business licensees and other licence holders or their employees, although the punishment should be more severe. Those convicted can be fined RM1,000, or jailed three months, or both.

Yes, all Malaysian taxi drivers are not bad but it would be correct to say that the vast majority act under very difficult circumstances because they don’t own the taxi licences which are given as a tool of patronage to reward individuals and connected companies.

These licences are then purveyed under conditions very disadvantageous to the taxi drivers. They have to pay at least RM55 a day for the use of the vehicle and be responsible for all maintenance, repair and fuel for the vehicle. By the time they can actually put money in their pockets, they must collect about RM70 - RM55 for rental and perhaps RM15 for fuel.

This licensing is at the heart of the problem of taxis in Kuala Lumpur and Malaysia - most taxi drivers don’t own their licence. All attempts to solve the taxi problem have failed because middlemen were taking away a huge portion of the earnings of taxi drivers without doing any work, inflating taxi fares.

Paradoxically, it is Uber and Grab who will show the way out of this problem.

If you own a car which is not too old and which is in good condition, you can drive and collect fares based on their system but you pay them a commission ranging from 20-25%, their drivers tell me. So, you are already profiting from the first trip you make with them because the cost of petrol is much lower than the fare even if you give 25% away...