Introduce price controls for e-hailing services

E-hailing is a great example of how a technological innovation can disrupt an existing market and in this case, it threatens to wipe out taxi services but at the same time revolutionise the way consumers commute.

Around the world, taxi operators are demanding regulatory protection against e-hailing services as their livelihood is affected but on the other hand, consumers are pleased. The situation is no different in Malaysia.

In Malaysia, policy-makers are continuing to explore regulatory solutions capable of appeasing all stakeholders with a minimum negative impact on consumers but unfortunately for consumers, the damage is already done.

The market is now dominated by a single player, creating an almost absolute monopoly.

The Uber-Grab merger was a disaster for consumers as it effectively distorted the market, eliminated competition, created an almost absolute monopoly and sadly our fair competition regulatory authorities could do nothing about it as the provision regulating mergers and acquisition is not part of the Competition Act.

Making things worse is the fact that policy-makers continue to ignore the fact that the market is an almost an absolute monopoly. What we are informed is that there are 17 active e-hailing service providers in the market but almost all of them are unheard of.

In order to protect consumers, the Malaysia Consumers Movement (MCM) urges the government to immediately introduce price controls on e-hailing services. A floor and ceiling price, including a floor cap on driver commission, must be implemented. This will not only protect the consumer but will ensure the orderly development of the industry while benefitting e-hailing drivers and taxi operators.

Consumer protection deserves utmost priority in this age of digitalisation. Monopoly allows abuse of market position with grave implications on consumers. E-hailing is the way of the future, however, so a regulated and fair marketplace gives all segments equal growth opportunity.

It undeniable that e-hailing has provided great comfort and convenience for consumers but it is also the government’s responsibility to ensure that this comfort and convenience is sustainable over the longer term.

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The writer is president, Malaysia Consumers Movement (MCM). - Mkini