The Malaysian Insight

MALAYSIAN taxi drivers are very much like the former ruling Barisan Nasional (BN) government - out of touch and out of time. 

And that they have to vent their spleen at Prime Minister Dr Mahathir Mohamad in Langkawi today just reflects their disconnect from the realities of Malaysia in the 21st century.

One, disruption or rather greater internet connectivity has made it possible for people to hail each other for rides. 

Two, the souring economy has pushed more people into taking up the option of being part of the e-hailing sector.

Three, there are more choices now for those who want a quick ride in clean and newer cars – notwithstanding the lack of insurance and even navigation sense among the fresh drivers using new cars who are clueless about their destinations.

These three reasons also prompted voters to kick out BN and welcome Dr Mahathir and his Pakatan Harapan (PH) colleagues into Putrajaya on May 9. The internet, the souring economy and the greater choices of politicians in the mix.

But a substantial minority of taxi drivers live in the past thinking they are entitled to their permits and fares in a public transport monopoly. Very much like the BN politicians lording over Malaysia all these years.

After all, they were once the demographic that propagated government news and influenced their fares. So much so they were courted with free tires in the past five years through the Teksi Rakyat 1Malaysia (TR1MA) programme that also provided insurance and other benefits for the 67,000-odd licensed taxi drivers.

They were seen as an essential component of Malaysian life and electorate. But over the years, disruption and disgust with shoddy taxi service - making them among the worst in the world - have pushed potential fares to other services.

And the statistics don’t lie. In June 2016, the number of taxis peaked at 109,870 but fell by 10,000 units to just 98,796 a year later, according to the Malaysian Automotive Association. That can only mean that business was down and the drivers left for other sectors.

In contrast, ride-hailing giant Grab reports that Malaysia is 33rd on the global revenue ranking list with revenues in the ride sharing segment projected at US$90 million (RM374 million) in 2018. 

The revenue is expected to have an annual growth rate of 15.3% and grow to US$160 million by 2022. Grab drivers in Malaysia also had an average jump of 48% in wages despite the user penetration rate of just 5.2% in 2018 but expected to hit 7% in 2022. 

It is telling that this new Mahathir government still wants to regulate the ride-sharing sector with licensing, insurance and model types rules to level the playing field for existing taxi drivers still seen as necessary in some parts of Malaysia.

But they need to pull up their socks and get with the programme of providing better service than those doing it part-time or while waiting for jobs in their chosen professions. Otherwise, they will still lose out to those in Grab and other ride-hailing apps.

The fact is, it is the user who decides whether they want to use a taxi or the more convenient apps to get a ride at competitive prices. Just as much as voters who decided to throw out BN for PH to form the government.

The people will decide. 

Being rude to Dr Mahathir will just hasten the end of the taxi business through market forces. Pretty much how BN lost GE14, when you think about it. – October 21, 2018.

* Jahabar Sadiq runs The Malaysian Insight.