Let’s zero in on the real problem in e-hailing ecosystem

 Are we dealing with a transport issue, a labour market issue, or a combination of both?

From Wan Agyl Wan Hassan

Whenever the issue of e-hailing comes up in Malaysia, the debate usually follows a familiar script.

Drivers complain that earnings are falling. Platforms point to rising operating costs and intense competition. Passengers worry that any increase in fares will make daily travel more expensive.

Before long, calls emerge for higher fares, lower commissions and stronger government intervention.

On the surface, the argument appears straightforward. If drivers are struggling, fares should go up or commissions should come down.

But what if the problem is not as simple as that? What if Malaysia’s e-hailing challenges are not primarily an e-hailing problem at all?

The concerns raised by drivers are real and should not be dismissed. Anyone who spends long hours behind the wheel, absorbs the costs of fuel, maintenance, insurance and vehicle financing, and still struggles to make ends meet deserves to be heard.

Yet acknowledging the problem is not the same as understanding its cause.

Too often, public discussions assume that shrinking driver earnings can only be explained by platform commissions or fare structures. That may be part of the story. But it is unlikely to be the entire story.

To understand why, we need to step back and look at how Malaysians actually use e-hailing services today.

Think about the worker finishing a late-night shift when train services have already stopped. Think about the factory employee travelling to an industrial area not connected by rail.

Think about the student trying to get from home to the nearest MRT station, or the elderly patient attending a hospital appointment.

For many people, these are not discretionary trips. They are essential journeys. And they reveal something important about the role e-hailing now plays in Malaysia.

For years, policymakers have spoken about the importance of first-mile and last-mile connectivity.

Massive investments have been made in MRT and LRT networks, and rightly so. These projects have transformed mobility for millions of people.

But rail lines alone do not complete a journey. The real measure of mobility is whether people can reliably travel from where they are to where they need to be.

That journey often begins and ends far away from the nearest station. This is where e-hailing has quietly become one of the most important parts of Malaysia’s transport ecosystem.

In many cases, e-hailing is not competing with public transport. It is connecting people to it.

In other cases, it is filling mobility gaps that public transport cannot yet serve effectively.

That distinction matters because it changes how we should think about the industry’s current challenges. If e-hailing has become an essential component of how Malaysians access jobs, education, healthcare and public transport, then the debate cannot be reduced to a simple disagreement between drivers and platforms.

The sector is performing a broader public function.

The same applies to the labour market.

For some people, e-hailing is a full-time occupation. For others, it is a secondary source of income that helps offset rising living costs.

Some enter the sector during periods of unemployment or career transition. Others value the flexibility it provides compared to traditional employment.

In other words, e-hailing is no longer just a transport service. It has also become an economic buffer for many households.

This raises a question that rarely receives enough attention.

Are we dealing with a transport issue, a labour market issue, or a combination of both? The answer is increasingly the latter. That is why quick fixes often prove inadequate.

Higher fares may improve driver earnings, but they may also make mobility less affordable for passengers. Lower commissions may provide some relief for drivers, but they do not automatically address broader questions about competition, sustainability or long-term investment in the sector.

Most importantly, neither solution addresses the deeper structural issues.

Do we have too many drivers relative to demand? Are drivers spending too much time waiting between trips? How much demand for e-hailing is driven by gaps in public transport? Does the government have sufficient data to determine whether the market is functioning as intended?

These are not minor questions.

They are the questions that should come before any discussion about changing fares or commissions. Yet much of the public debate focuses on solutions before there is agreement on the diagnosis.

The danger of doing so is obvious. If we misdiagnose the problem, we risk implementing policies that address the symptoms while leaving the underlying causes untouched.

The reality is that everyone in this ecosystem has legitimate concerns.

Drivers deserve sustainable earnings.

Passengers deserve affordable mobility.

Platforms require a business environment that allows them to continue investing and operating.

Government needs reliable data to make sound policy decisions.

None of these objectives are unreasonable. The challenge is that they must be balanced simultaneously, not pursued in isolation.

Perhaps that is why the current debate feels increasingly unsatisfactory. Every stakeholder is arguing from their own perspective, yet few are asking what role e-hailing is actually expected to play in Malaysia’s future mobility system.

Is it simply a commercial service? Is it an extension of public transport? Is it part of the country’s labour market safety net? Or has it become all three at once?

Before deciding whether fares should rise or commissions should fall, Malaysia may need to answer those questions first. Because if e-hailing were to disappear tomorrow, the country would quickly discover how much mobility it has quietly outsourced to private platforms and gig workers.

And that suggests the issue before us is far bigger than fares alone. - FMT

Wan Agyl Wan Hassan is the founder and senior advisor of MY Mobility Vision, a transport think tank.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.