Enhance E Hailing Driver Incentives As Alternative To Floor Price Say Experts

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E-hailing drivers are calling on the transport ministry to impose a floor price for fares, arguing that the current charges set by operators were too low and unfair to them. (File pic)
PETALING JAYA: The government should look into enhancing incentives for e-hailing drivers to improve their earnings instead of setting a floor price for fares, two experts said.
Last month some 1,200 e-hailing drivers submitted a memorandum to the transport ministry calling for a minimum ride fare to be imposed to boost their income.
Transport expert Wan Agyl Wan Hassan and economist Goh Lim Thye said that while a floor price could stabilise the drivers’ income, it may also lead to costlier fares and push users to opt for other modes of transport.
“Malaysians are sensitive to price, especially with the cost of living skyrocketing,” he said.
Wan Agyl, the founder of transport think tank MY Mobility Vision, said that if fares become too expensive, users may start looking for alternatives and may return to public transportation, use their own cars or simply cut back on travel altogether.
“If individual fares are raised, the number of trips could drop and the drivers we are trying to help might end up earning less overall,” he said.
Wan Agyl suggested that the government assist e-hailing companies by providing tax breaks and other incentives to help them pay drivers more while staying competitive.
It could also assist drivers directly by providing subsidies for fuel and car maintenance to reduce their costs, he added.
Goh said raising the floor price mechanism has proven counterproductive in New York.
He said the city’s minimum wage laws, designed to raise earnings, had caused fares to rise even for non-peak hour travel. This, in turn, has resulted in reduced service usage in some areas of the city, he said.
Goh said enhancing driver incentives could raise their earnings without affecting fare structures.
“Incentives paid for off-peak driving in Singapore have helped balance driver income and manage consumer costs efficiently,” he said.
Likewise, government support in the form of tax rebates and deductions, similar to those in South Korea, can also reduce the financial burden of drivers and ensure they retain a larger portion of their earnings.
On Dec 20, the drivers called for Putrajaya to impose minimum e-hailing fares across the country, arguing that the current prices set by operators were too low and left them shortchanged.
They are seeking a minimum fare of RM8, after deductions for e-hailing operators’ commissions, in the Klang Valley, Penang, Johor and Melaka.
In Perak, Pahang, Negeri Sembilan, Kedah, Terengganu, Perlis, Sabah and Sarawak, the drivers want the fare to be set at RM7 nett the commissions.
Transport minister Loke Siew Fook previously said the government has no plans to regulate e-hailing fares. - FMT

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