Expect longer wait for e-hailing cars, food delivery in Malaysia as new rules, protests hit gig economy

Passengers currently wait for an average of six minutes for a ride.
The Straits Times

Some Malaysians may have to wait longer for their e-hailing cars and food to arrive at their doorsteps.

Stricter government rules on e-hailing cars, and protests against Foodpanda by riders and customers have sent shockwaves in Malaysia’s gig economy.

The Malaysia government, in trying to raise safety standards, want all drivers of e-hailing companies to undergo written examinations on traffic laws and health checks.

They also have to change the status of their vehicles from individual private vehicles to e-hailing private vehicles, in order for them to obtain e-hailing vehicle permits (EVP) ahead of the deadline this Saturday.

There are some 167,000 e-hailing drivers in Malaysia, but news reports say 22 per cent of Grab drivers have quit to avoid complying with the stricter regulations.

Grab, the biggest player in a market of 31 e-hailing firms, warned customers on Wednesday (Oct 9): “You may have to wait longer for your ride, especially during peak hours” due to fewer drivers on the road after the deadline. Passengers currently wait for an average of six minutes for a ride.

Meanwhile, dozens of riders for food delivery company Foodpanda are protesting against a new payment scheme that they claim would lower overall wages.

The company has changed the way the riders are paid to the number of deliveries made, compared to the number of hours worked previously.

Payment per order has been raised to between RM4.50 and RM7, from between RM3 and RM5 previously.

The complaints of the young riders have been amplified by Youth and Sports Minister Syed Saddiq Syed Abdul Rahman who met with the protesting group, in a surprise intervention by a top official. Foodpanda has some 13,000 riders nationwide.

Some users have begun a boycott, claiming the company is being unfair.

The turmoil in the gig system reflect how the players, workers, customers and the government are adjusting to the new ways of hailing a cab and ordering food.

Transport Minister Anthony Loke on Wednesday (Oct 9) assured the e-hailing industry that it will be given time to comply with the rules.

“We will enforce them in stages… We are not going to disrupt the industry,” Mr Loke told a news conference.

Malaysia E-Hailing Drivers Association president Daryl Chong told The Straits Times: “We are very glad that there will not be any disruption to the system.” He had previously expressed concern as many drivers had yet to receive their EVP as the deadline loomed.

While the measures are to regulate the industry’s safety and standards, there are fears that prices will rise if many drivers chose to leave the industry.

The elderly and those who are not proficient in Malay are also said to face difficulty in doing the written tests, while there are reports that syndicates are offering guaranteed PSVs for RM800 without having to go through the process.

Mr Loke said 69,053 drivers have passed the written exams so far, while 32,667 have failed. Some 54,583 drivers have EVPs as of Oct 8.

Mr Kamarul Hisham, 38, an e-hailing driver for three years is still awaiting his EVP, which he said will take two weeks.

Following an inspection of his car, which is mandatory for vehicles aged three years and older, he had to fork out RM1,000 (S$330) to replace several parts, including tyres and brakes. This is on top of RM60 for the public service vehicle licence and medical check up.

“All this is a financial burden for me. The government said they want to help the B40 group but when they do things like this, it’s like they just want us to die,” he told The Straits Times, referring to the Bottom 40 group which consists of families with monthly household incomes below RM4,360.

Many of his friends had quit driving because of the new criteria, he said.

Amid the protests, Foodpanda has explained that the new scheme is fair and rewards those who work hard.

Foodpanda Malaysia managing director Sayantan Das said on Monday that initial data showed a good proportion of riders are actually earning more under the new scheme, which was implemented from Sept 30.

“Contrary to what has been reported, the new scheme actually gives performing riders a chance to earn more, up to 50 per cent more, and those not performing as well to be motivated to take more shifts to get a bigger piece of the pie,” he said.

Observers wonder if the gig economy faces an impending bubble, as it could be unstable with no safety net or retirement funds.

“It is important – and possible – for workers in the so-called gig economy to be paid living wages while such firms to continue to thrive,” said government MP Nik Nazmi Nik Ahmad. “All parties should realise that keeping wages low does nobody any good in the long-run. Malaysian workers’ pay still lag behind other benchmark economies.”

Read also: ‘Numerous complaints’ led to Grab’s RM87m fine, competition commission CEO says