E-hailing drivers shift focus to bigger cities

The sluggish economy and weakening tourism industry have resulted in declining demand at smaller townships


MORE e-hailing drivers are beginning to migrate to bigger cities as a result of the downturn in demand for rides in areas previously frequented by tourists.

JomRides head of marketing Musfaizal Mustafa said the sluggish economy and weakening tourism industry have resulted in declining demand at smaller townships.

“This led these riders to seek greener pastures in urban areas like Kuala Lumpur and Johor Baru,”

“Many of the main businesses are centred around the Klang Valley, as well as corporate administrations. With most industries back at work, there has been some scepticism in using public transport, so e-hailing has been the next best option,” he told The Malaysian Reserve in an interview recently.

According to Musfaizal, drivers began moving to larger cities when businesses in smaller cities had to reduce working hours due to regulations, which resulted in slow demand for rides.

“This included restaurants and entertainment spots like bars which now closes earlier daily. We also noticed more people are shopping online, this meant fewer people needed to go out. All these factors contributed to the decline in rides.”

“In the past, places like Ipoh used to have an influx of tourists, but now they too are more comfortable using their own vehicles to get around,” Musfaizal said.

Additionally, he said there were a noticeable number of foreign workers using e-hailing, but during the Movement Control Order, this also dropped drastically.

He noted, however, there are still drivers in the smaller cities despite the numbers of jobs being relatively low.

“In the last few weeks, we’ve seen drivers move back to their original locations, but the impact of the pandemic is likely to continue,” he said.

Musfaizal added that overall, the industry has seen a 50% drop in rides prior to a few months before Covid-19 hit.

“The average earnings of drivers are less than RM100 per day. And for the full-timers, this is definitely an issue. Furthermore, I’ve noticed jobs are mainly about delivering parcels and food compared to picking up passengers these days,” Musfaizal said.

Meanwhile, Grab Malaysia announced last month that it is expanding its services into more rural cities and townships in the Southern and Northern regions of Malaysia.

In a statement, it said the expansion exercise included Mersing, Segamat, Cameron Highlands, Pantai Remis and Baling, and is part of its journey in helping to create opportunities for the gig economy.

“The expansion plan will see GrabCar being available in Mersing and Segamat from the end of September 2020 onwards, followed by GrabFood and GrabMart services planned to be launched in the fourth quarter of this year. In the Northern region, Grab will be covering cities such as Cameron Highlands, Pantai Remis and Baling,” Grab Malaysia said.

It also extended its “Pakej Pikul Bersama” initiative to include new drivers on the platform by providing a one-off reimbursement of up to RM120 for the Public Service Vehicle licence and RM70 for initial Puspakom vehicle inspections.