Wee: Govt does not regulate e-hailing base fare

 

The government does not regulate base fares set by e-hailing operators (EHO), said Transport Minister Wee Ka Siong.

In a statement today, he said EHOs are allowed to set two charges - a base fare and a 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.

"The EHOs are permitted to set their fare structures based on their own formulae and their terms of service with their consumers in a free market," said Wee.

He said this in a statement this morning following an engagement session by the Ministry of Transport (MOT) with EHOs on their recent price surge.

His statement does not indicate the government is making any regulatory changes at the moment. Wee promised the government will continue to monitor the situation to "ensure fairness" and prevent "undue burden on consumers".

"The EHO concerned has also assured the MOT of allocating more resources towards increasing the number of drivers currently available.

"At the same time, the government has also continued to ensure that more EHOs along with taxis and buses are available to provide commuters with better last-mile connectivity and more choices.

"More than 130,000 individuals hold vocational licenses to work as e-hailing drivers. This group is expected to grow as more driving schools and EHOs receive more candidates to become e-hailing drivers for 21 EHOs with active licenses nationwide including the Klang Valley," he said.

An e-hailing application

Wee said the engagement with the EHOs revealed two reasons for the price surge.

Firstly, EHOs claim their number of registered drivers has dropped by some 30 percent compared to the period before the Covid-19 pandemic began.

Secondly, the demand for e-hailing services had increased dramatically since April 1 due to the "transition to endemicity" stage.

"These factors have had the most effect on the fare algorithms employed by the EHOs which account for many factors including distance, traffic volume, weather patterns, as well as market supply and demand.

"They all play a part in the increase in fares lately," said Wee. - Mkini