Regulars of ride-hailing services like Grab are in for a bit of a shock this weekend, as fares and wait times are set to increase considerably come July 12, according to a report from The Star.

That’s the deadline for drivers to obtain their mandatory Public Service Vehicle (PSV) licence, and the resulting reduction in the number of drivers could make life difficult for users. The Malaysian E-hailing Drivers Association (MeHDA) is predicting hikes as high as 50%, depending on supply and demand.

“We will see fewer drivers when the deadline comes because many part-timers are opting out, plus many other drivers are still not PSV-ready,” said president Daryl Chong. “Passengers will have to wait longer because the distance between them and the drivers will be much further.”

He added that ride-hailing companies may apply surcharges to help with supply issues after the deadline. “The surcharge on fares is already in practice now with a maximum cap of 100% set by APAD [Land Public Transport Agency]. For example, a RM10 ride can go up to RM20 during peak hours.

“E-hailing companies give incentives to drivers during peak hours in the morning and evening to encourage them to pick up passengers. But higher fares would mean fewer passengers. So they will mostly keep the increase minimal, at perhaps RM15 so that passengers are not badly affected. If this mechanism is applied after the deadline, fares will certainly see an increase,” he said.

On Tuesday, the transport ministry said that only 16,338 out of the approximately 167,000 ride-hailing drivers in Malaysia have signed up for the PSV test, with 62% (10,151) of those having qualified for the licence ahead of the deadline.

Chong said that the situation will only be “a transitional occurrence,” as drivers continue to apply and receive their licences. “The number of drivers will pick up again and the situation will improve. We expect 70% of the total e-hailing drivers to be PSV-ready by the end of the year,” he added.

He also said that ride-hailing companies may absorb the price difference and maintain the same fares even when there is a shortage of drivers during non-peak hours. “They will want to keep the passengers by not overcharging them and to ensure they are not affected,” he said.

Grab Drivers Malaysia Asso­ciation president Arif Asyraf Ali said he also expected higher fares and longer wait times, dubbing the situation “Carmageddon”. However, he stopped short of predicting said increase, adding that the surcharge mechanism is “dynamic pricing that is calculated based on supply and demand.”

“It is hard to say for now, as drivers who are interested to continue driving are still in the process of getting their PSV licence. We can only see where it is heading after the deadline,” he said.

The incoming regulations were hailed (get it?) by the taxi industry, with Big Blue Taxi founder Datuk Shamsubahrin Ismail (pictured above) saying that the laws will eliminate up to 70% of ride-hailing drivers, and that the companies have already pushed hard for taxi drivers to join them. “I can see the demand to be very bright unless the Transport Ministry makes a U-turn,” he said.

While many taxi drivers have signed up to with those companies, Shamsubahrin claimed that the government was still not being fair to them. “I don’t understand what they want. They have to change their character and attitude,” he added.

His comments were echoed by the chairman of the Malay Taxi Drivers Association of Penang, Mohamad Yusoff S. Ibrahim. He said that taxi drivers could only make a living if there was a level playing field with ride-hailing drivers, and that includes a pricing parity. “We want the prices to be the same, then we can survive. Now the public say our price is very high.”

According to Mohamad Yusoff, around 90% of taxi drivers have found it difficult to earn a living, with many having to return their taxis after not being able to pay their loans. “There needs to be a level playing field. We have been doing this from the very beginning,” he said.

President of the Taxi Radio Association of Selangor and Federal Territories Rickman Hiew said that the regulations would benefit passengers as they would be covered by things like insurance. “This is what you call customer service. It is up to passengers who they want to choose,” he said