It’s been reported that the commission earned by taxi and ride-hailing companies has been capped at 20% of the total fare, following complaints that these services were charging drivers up to 25% in commissions. According to The Star, transport minister Anthony Loke said that the maximum commission rate was previously set at 20% for private vehicles and 10% for taxis.

“The surcharge rate is also limited to twice the fare charge,” he said, adding that the new law is an extension of regulations already passed in parliament last year, which legalised ride-hailing services like Grab. Loke also said that there would be a one-year grace period for these companies to comply.

We’ve already reported on the other regulations set to be introduced, including a requirement for ride-hailing service providers to register with the Companies Commission of Malaysia and Cooperatives Commission of Malaysia, as well as drivers to apply for a Public Service Vehicle (PSV) license and conduct annual Puspakom inspections. All vehicles must also have a minimum three-star ASEAN NCAP rating.

“We have also standardised the periodic inspection of vehicles to once a year after the vehicles are three years old, for both taxis and e-hailing, instead of once every six months for taxi services only,” said Loke. All service providers must also provide insurance coverage for drivers, vehicles, passengers and third parties, and that drivers must undergo a six-hour training stint costing RM200, he added.

On top of that, ride-hailing companies have to prepare a code of conduct and guidelines for driver complaints, which will be audited by the government. Passengers, meanwhile, will have to upload their proof of identity, such as their identity card or passport, to their apps to ensure driver safety.

Lastly, existing taxi drivers wishing to join ride-hailing services will be provided a RM5,000 grant to purchase a new or used vehicle, which will also be applicable for drivers whose mortgage contracts with taxi companies have ended, and who wish to continue driving under individual permits.

Loke said that the rising number of ride-hailing trips in Malaysia shows the popularity of these services. “It went up from six million trips a month in 2016 to 18 million a month this year. We have 200,000 registered e-hailing drivers and of the number, 50,000 are full-time. As for taxis, we have 67,000 of them nationwide, of which 52% are individually owned,” he said.

In other news, the transport ministry is also working with the Anti-Competition Commission to investigate Grab for possible monopoly after merging with Uber’s Malaysian business in March. Conversely, Grab said that it would have liked the government to consult the industry before announcing the regulations, as it would affect hundreds of thousands of drivers.

“We have just been alerted of the ‘regulatory suggestions’ and have yet to receive the formal operational directive,” said Grab Malaysia country head Sean Goh.