“EVOLVE, change, consolidate and co-operate,” that was the advice Land Public Transport Commission (SPAD) chief executive officer Mohd Azharuddin Mat Sah’s has for taxi companies.

He said he was not surprised to hear that taxi drivers are returning their cars to the companies they are renting them from.

“This was bound to happen. The entire business model of the pajak system is not sustainable,” he said, referring to the rent-for-hire scheme that has been practised by taxi companies for decades.

But things are about to change under the Taxi Industry Transformation Programme (TITP) that received Cabinet approval in August.

“Under the TITP, the Government wants to be transparent and we want to give both the drivers and passengers a choice, which is why we are moving away from the pajak model.

“We are now offering qualified applicants (taxi drivers) a chance to apply for their own individual licences for metered taxis and hired cars,” he said.

“This means taxi drivers can become their own boss,” Mohd Azharuddin added.

Qualified cabbies leaving the rental system will also receive a cash grant amounting to RM5,000 from the Government to purchase new vehicles.

And this can be in the form of a marked or unmarked car.

'The world is changing and you have to find ways to attract your drivers to stay on and continue to be part of the system.' - Mohd Azharuddin Mat Sah

Mohd Azharuddin said after opening registration for the scheme on Sept 1, SPAD had received significant interest from taxi drivers who want to get out of the pajak model.

“About 4,000 cabbies have submitted their applications and another 800 enquired about the programme and are keen to know more. All this happened within a month,” he said.

“With the right attitude and a clean record from the police and Road Transport Department (JPJ), we will give these cabbies what they need to help them become their own boss,” he said.

Levelling the playing field

The most interesting aspect about the transformation programme is that under the new regulation, ride-hailing companies will be incorporated in Malaysia.

This means Uber and Grab will come under the purview of the Land Public Transport Act 2010 that governs taxi drivers and will put both taxi drivers and ride-hailing drivers on the same level.

As such, taxi and ride-hailing drivers will have to be registered with SPAD and undergo Puspakom inspections as well.

Under the TITP, taxi and ride-hailing drivers will now carry one driver card which will be issued by SPAD.

Currently, taxis have to carry a PSV (Public Service Vehicle) licence issued by JPJ and another driver ID card given by SPAD.

Drivers of ride-hailing apps such as Uber and Grab do not have a PSV licence and are driving a private vehicle with no taxi permit.

Once the industry is regulated, which is expected to happen at the end of this year, both conventional drivers of taxi and ride-hailing apps will only carry one driver identification card issued by SPAD.

“We want to make it a seamless system with only one card for everyone. SPAD will also play the role of regulator,” Mohd Azaruddin said.

“Taxi drivers can choose to drive a taxi or register as a Grab or Uber driver, it is entirely up to the driver.

“At the end of the day, this will open up the market and give passengers a wider choice, which is healthy for the industry.

Ride-hailing apps

Asked to comment on feedback from taxi companies that the legalisation of ride-hailing apps would destroy the conventional taxi industry, Mohd Azharuddin acknowledged that taxi companies are unhappy about it.

“Change is never easy. This is a global issue. Every taxi company in the world is not happy about it.

“New York’s taxis are considered the best, but they are feeling the heat too since Uber’s debut.

“My advice to them is stop complaining, evolve and change your business model.

“The world is changing and you have to find ways to attract your drivers to stay on and continue to be part of the system,’’ he said.

On complaints that the taxi fare is too high compared to ride-hailing apps, Mohd Azharuddin said the increase in rates was based on the industry’s request and took into account the high cost of living and increased rental and maintenance costs of cars.

“But that is just the cap. Taxi companies are welcome to offer discounts and promo codes to passengers to lure them just like what ride-hailing apps are doing.

“No one is stopping you from being creative and innovative.

“As a business owner, you can absorb the cost of recalibrating your meters.

“You are running a business, so stop complaining and start innovating,” he said.

“We suggest that they work with Uber and Grab and see what is the right model for them.

“At the end of the day, they (taxi companies and ride-hailing apps) want more cars on the road, so work together and agree on a model and fare structure.

“As long as you stick to the ceiling fare, supply and demand will determine the price of rides,” he said.