The company says it can subsidise some of these new costs, or pass them on to passengers by raising fares
By MARK RAO / Pic By MUHD AMIN NAHARUL
Grab Malaysia said it will help drivers meet expected additional costs to operate under new conditions once e-hailing laws come into effect as part of measures to protect the earnings of operators.
The company said it can subsidise some of these new costs, or pass them on to passengers by raising fares.
A new law is going through Parliament to regulate the e-hailing industry and it is anticipated that new conditions may be imposed on drivers, including licensing and registration, which may incur the cost for drivers to sign up to these services, but the details have not been announced.
Grab Malaysia country head Sean Goh said the company was working closely with the Ministry of Transport and the Land Public Transport Commission on new conditions for its drivers, but nothing has been finalised.
He said many of the proposed changes, including driver verification, training, panic button in vehicles and insurance coverage are positive for the industry but may incur extra costs to implement.
“If certain alterations is too challenging, we will try and fine-tune it,” Goh told The Malaysian Reserve yesterday.
“But if we can’t change it, we will help our drivers through it.”
The requirement for mandatory vehicle inspections could deter drivers if they have to bear the costs themselves.
“If the regulations come in and drivers’ earnings drop, this will not be acceptable to us,” he said.
“The question is how to maintain earnings. Do we subsidise or pass on the cost to passengers? It is about drawing the balance between the two.”
The new laws are to come into effect under amendments of the Land Public Transport Act 2010 and Commercial Vehicles Licensing Board Act 1987, which will allow for traditional cabbies and e-hailing players to operate within the same industry.
Ride-sharing firms operating in the country have been given a one-year grace period to get used to the new regulations.
Goh was also positive on news that Malaysian Customs and the Inland Revenue Board are planning to tax foreign digital companies on their Malaysian earnings because it would allow Grab to compete better.
Amendments to the Goods and Services Tax (GST) Act, to make companies operating without a permanent establishment in the country liable to tax, is being pushed during the current parliamentary session.
“As a Malaysian company, we have always been tax compliant and paid GST while foreign digital players have been able to avoid paying taxes. This puts us in a difficult financial position — making it hard for us to compete,” stated Goh.
Goh said Grab is at the stage where it can now have productive talks with the government. Grab is also seeking tax reliefs for Grab drivers who want to buy Malaysian-made cars for ride-sharing use and subsidies on fares between public amenities.
Goh said these initiatives could be announced as early as tomorrow’s budget tabling.
The ride-sharing company revealed its “B365” initiatives geared towards making life easier for drivers on its network yesterday.
The company wants to provide better transparency on in-house operations, entering mutually beneficial partnerships, as well as raising the productivity of drivers.
Goh said that Grab is able to improve the yields of their drivers by 20% since the start of this year, resulting in better earnings for their drivers.