Dr Wee: Surge in e-hailing fares due to driver shortage, other factors

KUALA LUMPUR: The surge in e-hailing fares is due to a shortage of drivers and other factors, says the Transport Ministry.

Transport Minister Datuk Seri Dr Wee Ka Siong (pic) said the ministry and Land Public Transport Agency (APAD) met with e-hailing operators to understand the cause of the recent surge in fares.

"From the discussion, it is clear that there are two main factors that have led to this surge in e-hailing fares; a supply-and-demand imbalance and high traffic volume leading to longer travel times," said Dr Wee.

He said that the combination of these two factors have affected the service quality of e-hailing.

"With things now easing as of April 1, daily life seems to have returned to some normalcy and as expected, there is more traffic on the road," said Dr Wee.

"Meanwhile some E-hailing companies have seen their number of registered drivers drop by over 30% compared to pre-pandemic times," he added.

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Dr Wee said in a statement on Tuesday (May 24) that this has indirectly led to longer than expected waiting times for a vehicle in some places and the surge in fares.

He added that the sudden increase in demand for e-hailing services since April 1 due to increased economic activities compared to the height of the pandemic has added to the mix of reasons for the fare rise.

"These factors have the most effect on the fare algorithms employed by the e-hailing operators, which account for many factors including distance, traffic volume, weather patterns as well as market supply and demand," said Dr Wee

Dr Wee said that when it comes to e-hailing fare structure regulation, there are two charges - the base fare and the surcharge.

"The government does not regulate the base fare and the surcharge cannot be more than two times the base fare (taking peak rates and fuel prices into account)," he said.

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He added that e-hailing operators are permitted to set their fare structures based on their own formula and their terms of service with their consumers in a free market.

"They have assured us that there will be more resources allocated towards increasing the number of drivers currently available," said Dr Wee.

"At the same time, the government continues to ensure that more EHOs along with taxis and buses are available to provide commuters with more options," he added.

Dr Wee said that more than 130,000 individuals hold vocational licenses to work as e-hailing drivers.

"This group is expected to grow as driving schools and e-hailing operators receive candidates who can join the 21 operators with active licenses nationwide, including in the Klang Valley," he said.

Dr Wee also said that the government urges all operators to improve their communication channels with their consumers.

"We will continue to monitor the e-hailing industry to ensure fairness and prevent undue burden on consumers," he said.