Regulation Matters: Upholding the Spirit of the Regulation

As many are aware, the e-hailing industry has been given a one-year moratorium effective 12 July 2018 to comply to a set of regulations, and we are quickly approaching the deadline. While we welcomed the decision to regulate the industry, we are deeply concerned by what can perhaps be described as a lack of readiness by certain relevant agencies to facilitate the industry towards compliance. Furthermore, we have observed heightened enthusiasm by some enforcement agencies in taking rash actions against e-hailing drivers despite the moratorium period.

On behalf of all our driver-partners and us at Grab, we express our deep concern that the processes and infrastructure necessary to ensure a seamless transition are taken too lightly. These issues will not only affect the e-hailing industry, but also the millions of people who rely on e-hailing to get around, and the hundreds of thousands of Malaysians who boost their household income via e-hailing.

We believe the regulations were originally intended to enhance safety and quality.

We believe the regulations were originally intended to enhance safety and quality. However, without a transparent and inclusive process, this can instead be distilled as measures leading to higher costs, greater friction and thus, affect service availability for all.

Our three suggestions for the regulators are to:

• proactively involve all key stakeholders throughout the process especially when introducing new measures that have previously never been raised,
• be open to innovative proposals aimed at uplifting the playing fields, and
• ensure the new rules can be enforced seamlessly with the least cost and burden to the industry as a whole which includes the consumers.

we have been taking steps to ensure stronger quality measures are in place

On our side, with regulations coming into play, we have been taking steps to ensure stronger quality measures are in place for our driver-partners to help them with the transition. However, we are compelled to share our views on the processes (or lack thereof) that have been put in place.

Level of readiness of the regulators

While we note our Minister’s call for the industry not to wait till the 11th hour to prepare for compliance there are still many moving parts that have yet to be confirmed. As a result, we are struggling to give our driver-partners our fullest support and sufficient certainty during the transition period. For instance:

• Training module: It is understood that the PSV training module, which should have been implemented last year, will not be ready until March. With the looming deadline, how do the agencies expect hundreds of thousands of drivers to be trained and certified within 4 months? Fortunately, we have previously discussed a viable alternative with our Minister: a digital training platform that delivers the equivalent of 6 hours (or more) worth of timely, relevant content throughout a driver’s journey. Unfortunately, to date, the agencies have still not reflected this alternative in the policy wording. Instead, current policy still requires physical attendance which has been practised for decades by traditional metered taxis, in spite of a lack of evidence that this has uplifted service quality in any way.
• E-hailing insurance: There are currently insufficient e-hailing insurance products, and the ones on the market will not cater for the vast majority of drivers, especially part-time drivers. We would like to call out, in particular, the great collaborative efforts of Bank Negara Malaysia, Persatuan Insurans Am Malaysia (PIAM) and the insurance companies in Malaysia for their sincere engagement to get across the hurdles. However, these changes require alterations to a heavily regulated insurance framework, so the hard deadlines here need to be far more flexible.
• PUSPAKOM: There are limited car inspection locations available nationwide. We currently have driver-partners across 35 cities and major townships in Malaysia; with limited locations, we are concerned that a push for physical inspection will affect the Puspakom system. In fact, based on our estimates, full physical inspection for each and every one of the vehicles on our platform may require up to 20 months. Therefore, it is evident that a lighter-touch, digital alternative should be considered to enhance vehicle quality and safety.
• Other e-hailing requirements: A variety of additional requirements, such as the e-hailing road tax, disc and stickers, have not been communicated clearly to the industry. This makes it difficult for us to cascade this information to our driver-partners and is causing significant unrest amongst them.

For each of the above, we hope that either the necessary preparations are put in place or the ministry will engage the industry further to determine more viable, innovative solutions that will help achieve the spirit of the regulations, without being fixated on the form of these policies.

Sudden additional requirements and shorter deadlines

Recently, JPJ has introduced a barrage of new requirements that have not previously been discussed; for instance, fire extinguishers in every car, unique road tax discs and mandatory inspection for all cars regardless of age. These were added unilaterally without consultation and seemingly without concern for the financial implications to our driver-partners and passengers. As it is, our driver-partners are already burdened with far too many additional regulatory costs and this directly increases the cost of living for them.

In addition, enforcement agencies are also setting unrealistic deadlines, be it in submitting documents to support an application for the corporate licence, or applying to be an accredited training agency, which was only made available last month. Setting unrealistic deadlines, of between 24 hours to a week, does not help in building trust within the industry, and makes it obvious that we are not working together towards ensuring a smooth transition for regulations. If the enforcement agencies were serious about this, they would have been more mindful and conscientious of the process required by providing the industry and themselves a realistic timeframe. These knee-jerk reactions are not only affecting us but also other members of the industry, especially those who are new to the industry.

Lack of engagement with the industry

Over the past few months, we have not had clear communications on the processes from the enforcement agencies. There has not been any meetings with the enforcement agencies or the ministry in the last few months; the last industry briefing was in October 2018 with the now-defunct SPAD. Looking at the different parts of the processes, we anticipate some teething problems. Hence, on behalf of the industry, we have put forth various win-win ways of working with the enforcement agencies, as we firmly believe that cooperation rather than confrontation, will serve to benefit the rakyat the most.

Overall, we have been hearing a growing voice of concern from the millions of Malaysians who rely on e-hailing for transport or a livelihood. Based on the uncertainty, lack of engagement and disproportionate focus on the old interpretation of outdated policies, we fully agree that both the government and e-hailing operators have to work more closely together for the good of the public.

In the spirit of the New Malaysia, we, therefore, call upon the authorities to make a stand to provide clearer and more feasible guidelines in facilitating the rollout of the e-hailing regulations. We want to ensure that the spirit of the regulation is upheld, and the processes or requirements set are scalable as we move towards creating an innovative regulatory framework for e-hailing.

This opinion piece was contributed by Grab Malaysia. If you have an article or opinion that you would like to contribute for the benefit everyone, share it with us here.

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