Wee explains cause of fare spike

KUALA LUMPUR: Multiple factors, including a shortage of ehailing drivers, are behind the recent surge in ehailing fares, said the Transport Ministry.

Its minister Datuk Seri Dr Wee Ka Siong said there were two key factors: An increase in demand and high traffic volume leading to longer travel times.

“The Transport Ministry and Land Public Transport Agency (Apad) have met with ehailing operators (EHO) to understand the cause.

“From the discussion, it is clear that the two main factors causing this surge in ehailing fares are a supply-and-demand imbalance and traffic volume.

“When put together, these factors affect ehailing service quality.

“With things easing since April 1, daily life seems to have returned to normal, and as expected, there is more traffic on the road.

“Meanwhile, some ehailing companies have seen the number of registered drivers drop by over 30% compared to pre-pandemic times.

“This has indirectly led to longer waiting times for a vehicle in some places,” he said in a statement yesterday.

On Monday, Dr Wee urged ehailing service operators to investigate the claims from customers that fares had quadrupled during peak hours.

They also called for government intervention such as price regulation.

According to Apad, the concept of ehailing services is one where users and service providers mutually agree on an amount before both proceed with the arrangement.

“These factors have the most effect on the fare algorithm employed by the EHOs which takes into account many things like distance, traffic volume, weather and market supply and demand.

“They all play a part in the increase in fares,” said Dr Wee, who added that his ministry is well aware that many people rely on ehailing.

“When it comes to ehailing, in terms of fare structure regulation, there are two charges: The base fare and surcharge.

“The government does not regulate the base fare, while the surcharge cannot be more than two times the base fare (taking peak rates and fuel price into account).

“EHOs are permitted to set their fare structures based on their own formula and their terms of service with their consumers in a free market,” he said.

Dr Wee said EHOs have assured the government that there will be more resources allocated towards increasing the number of drivers.

“At the same time, the government will continue to ensure that more EHOs, along with taxis and buses, provide commuters with more options.

“More than 130,000 individuals hold vocational licences to work as ehailing drivers.

“This group is expected to grow as driving schools and EHOs receive candidates who can join the 21 EHOs with active licences nationwide, including the Klang Valley,” he said, adding that the government has asked EHOs to improve their communication channels with customers.

“We will continue to monitor the industry to ensure fairness and prevent undue burden on consumers,” he said.

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