More on the ride-hailing fare increase issue, this time on pricing aspects. It was recently reported that ride-hailing fares, including that of Grab, had increased “exorbitantly” (by up to 400%) during peak hours, sparking discontent from consumers who called for government intervention. This prompted the transport ministry to act, requesting ride-hailing operators to explain the reason for the surge in pricing.
Operators have told the ministry that a combination of not enough drivers and significantly increased demand are the main factors that have brought about the price surge. These, it is said, have an impact on the fare algorithms – which take into account factors such as distance, traffic volume, weather patterns as well as market supply and demand – employed by these companies.
Meanwhile, consumers expecting the government to step in and regulate pricing will be disappointed to hear that no such intervention will occur. According to transport minister Datuk Seri Wee Ka Siong, in terms of fare structure regulation for ride-hailing services, there are two charges, which is the base fare and the surcharge.
He said that 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 prices into account.” In a statement, he explained that ride-hailing operators and providers are permitted to set their fare structures based on their own formula and their terms of service with their consumers in a free market.
Wee said that measures to alleviate the problem are being put in place. “The ride-hailing operators have assured us that there will be more resources allocated towards increasing the number of drivers currently available. At the same time, the government continues to ensure that more ride-hailing operators, along with taxis and buses, are available to provide commuters with more options,” he said.
He said at present, more than 130,000 individuals hold vocational licenses to work as ride-hailing drivers, and that this group is expected to grow as driving schools and e-hailing operators receive more candidates to become ride-hailing drivers for 21 operators with active licenses nationwide, including in the Klang Valley.
Wee said the government urges all ride-hailing operators to improve their communication channels with their consumers, and that the ministry will continue to monitor the industry to ensure fairness and prevent undue burden on consumers.