E-Hailing may face driver shortage

The e-Hailing industry may be hit with a shortage of drivers after the July deadline to comply with the new regulations as these companies foresee between 20% and 50% of their drivers quitting.

The Star spoke to several e-Hailing companies who said they expect part-time drivers to quit working as the Public Service Vehicle (PSV) licence application process is cumbersome and expensive.

“Drivers dropping out is definitely going to happen, that is undeniable,” Mula Kuala Lumpur branch manager Kumeran Sagathevan said.

“We are expecting a minimum of a 20% dropout rate,” he said.

Starting April 1, e-Hailing drivers must apply for the PSV licence at driving institutes or e-Hailing operator (EHO) centres that are approved by the Road Transport Department.

Drivers have to undergo a six hour training session at driving centres and pay up to RM200 for the PSV licence.

On top of that, they must get initial and annual vehicle checks at Computerised Vehicle Inspection Centres (Puspakom), pass criminal background and medical checks, contribute to Socso, purchase a e-Hailing add-on car insurance, and equip their cars with safety equipment including fire extinguishers.

The estimated cost to complete the requirements is RM800.

Drivers have until July 12 to complete the licensing requirements, after which the Transport Ministry will take action on unlicensed e-Hailing drivers.

Kumeran said while full-time drivers will comply with the regulations, part-time drivers will likely stop driving.

Transport Minister Anthony Loke previously said that Malaysia has around 200,000 e-Hailing drivers, three-quarters of whom are part-time drivers.

“The part-timers do not want the hassle of applying for the licence, they like the simplicity of becoming a driver where you can just turn on the app and start driving.

“When you impose regulations like this, e-Hailing is not exactly e-Hailing anymore.

“The bulk of the part-time drivers will look at other sources for revenue,” Kumeran said, adding that the company is helping its drivers meet the licensing and cost requirements.

Carriage For Her CEO Nick Smith anticipates a 30% to 40% dropout rate from its pool of female drivers.

“Many of our drivers haven’t made up their mind on whether to apply for the licence or not.

“Many are still adopting a wait and-see attitude,” he said.

“I think in the short term if they (the authorities) are strict on enforcing the PSV regulations, the e-Hailing industry will take a big hit for a few months,” Smith added.

He said the regulations will affect the fares of some e-Hailing companies as it will increase the company’s expenditure.

For example, Carriage For Her is paying RM100 per driver to register them for the licence, though the company has no plans to increase its price at the moment, he said.

Grab Drivers Malaysia Association president Arif Asyraf Ali expects a whopping 50% dropout rate.

“Some drivers think the regulation is a good mechanism and may continue, some think it is too much trouble to go through,” he said.

Arif said with fewer drivers on the road, an increasing number of consumers and riders may find it difficult to find a driver and the demand may drive up the fare.