The Land Public Transport Commission (SPAD) has outlined its plans to improve the taxi industry in Malaysia. The Cabinet-approved Taxi Industry Transformation Programme (TITP) is geared to regulate e-hailing services (Uber/Grab), while providing existing taxis new opportunities to remain sustainable and competitive.

Quite a few points have been announced, most of which are set out to “resolve long-standing structural issues besetting the taxi industry” and to create a fair playing field that benefits drivers, operators and passengers. It’s said to be a clear way forward for the industry to “evolve towards a more sustainable future by being responsive to market forces.”

The TITP is underpinned by four key principles: leverage on technology, improve taxi drivers’ income and welfare, improve taxi drivers’ service quality and conduct and rationalise taxi fares.


As a start, e-hailing (Uber/Grab) will be regulated as an intermediary service under the Akta Pengangkutan Awam Darat 2010 (APAD). Once passed in Parliament, e-hailing companies will be required to be incorporated in Malaysia, and all e-hailing drivers will need to have a Drivers’ Card issued by SPAD.

Vehicles providing e-hailing services will also be required to comply with compulsory road worthiness inspections. Regulations will also be imposed on e-hailing companies and drivers to ensure that legitimate policy objectives like compulsory insurance coverage and safety requirements.

From September 1 onwards, SPAD will issue individual taxi licenses under the metered taxi class and hire cars. Qualified taxi drivers exiting the taxi rental (pajak) system will receive a cash grant amounting to RM5,000 from the Government to help them purchase a new vehicle.

Click to enlarge the SPAD’s full statement.

Speaking of a new vehicle, taxi license holders will have much wider options, as vehicle models for taxis will be liberalised – no longer limited to select models like the Proton Exora and Toyota Innova. All models with at least a three-star safety rating by ASEAN NCAP will be approved, to accelerate the replacement of ageing vehicles and reduce costs for taxi drivers and operators.

Taxi rental contracts will be standardised, with operators to include a rent-free day for Puspakom inspection, annual and sick leave, first party vehicle insurance and deposit refund at the end of the contract. Taxi operators will also have mandatory KPIs, with fleets required to be linked to a dispatcher (mobile application, in addition to phone bookings, web booking or radio booking) to increase drivers’ earning.

For added safety, SPAD will impose a new set of stringent screening processes on taxi and e-hailing drivers, including health checks, criminal records, traffic offences and violations of SPADs Operating Licence conditions. SPAD will also work with the JPJ to monitor taxi drivers under the new Kejara Demerit Points System.

Screen Shot 2016-08-16 at 6.56.31 PMScreen Shot 2016-08-16 at 6.56.41 PM

More importantly, the metered fare structure for taxis will be rationalised with the current budget fare. New TEKS1M fares will have a minimum charge of RM3, plus surcharges of 25 sen/200 m and 25 sen/36 seconds, down from the existing rates of RM4, 30 sen/200 m and 30 sen/36 seconds respectively.

For taxis picking up fares at airports and terminals, the existing zonal fare will be replaced by a distance based calculation to ensure consistency and fairness. Post-rationalisation, fares to certain destinations will go up, while others will drop considerably. Refer to the table above for examples.

Lastly, metered taxi licence drivers will have the option of applying a dynamic pricing structure, which allows them to use the meter for street-hails, or a different e-hailing fare structure if they provide e-hailing services.

Big changes ahead, then. Dear readers, what do you think of this?