Transport Ministry Has No Plans To Regulate Grab And E-Hailing Prices

Transport Ministry Has No Plans To Regulate Grab And E-Hailing Prices

There are no plans to regulate e-hailing service prices or impose a floor price by the government, says Transport Minister Anthony Loke.

As reported by Bernama, Loke explained in the Dewan Rakyat that setting a floor price is a complicated process which requires considerations from both the driver and the passenger.

“If the floor price is set, then the fare charges for the users will possibly increase as well. When that happens, the MPs will come back to the August Hall and raise an issue about the rising fares. There are variables like traffic congestion, weather, distance, time as well as demand and supply which takes into account,” Loke said.

“We should look into dynamic pricing mechanisms which rely on supply and demand therefore the fare rate will be flexible based on real-time factors,” he continued.

Loke was responding to a question from Datuk Larry Sng (PBM-Julu) regarding the outcome of the ministry’s meeting with e-hailing companies on the issue of low fares that affected gig economy workers.

The transport minister revealed that the Land Public Transport Agency (APAD) had met with stakeholders from the e-hailing industry and that the companies were encouraging their partners to operate in high-demand areas with incentives offered to meet the demand.

“For example, one e-hailing service provider is informing their partners one week in advance on incentives through their platforms or application. Such a move can assist the partners or drivers to plan their operating times and to meet their income target,” said Loke.

E-hailing groups, however, are concerned that the decision to not set a floor price for e-hailing fares could affect the welfare of gig workers.

Malaysian E-Hailing Association chief activist Jose Rizal shared his concern, saying that e-hailing companies could abuse travel fares to attract customers at the expense of gig workers’ income.

“If there is no floor price, companies which are in competition with each other may be tempted to reduce their fares to attract more customers” Rizal said to The Star.

Drivers for e-hailing services currently earn 50sen and 70sen per km, or 25sen to 35sen per minute, and without any proper system to regulate fares in the e-hailing app, companies can easily manipulate the fares for their own gain.

Read more: Which Jobs Earn The Highest Salaries In Malaysia?

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