KUALA LUMPUR, Oct 14 ― The Land Public Transport Commission (SPAD) has told taxi companies to innovate in order to compete with ride-sharing businesses as they will all soon come under the same regulations.

StarMetro reported SPAD chief executive officer Mohd Azharuddin Mat Sah as advising taxi companies to change their business model, saying they are free to offer discounts and promo codes to passengers to attract customers, like what Uber and Grab are doing.

“No one is stopping you from being creative and innovative. As a business owner, you can absorb the cost re-calibrating your meters. You are running a business, so stop complaining and start innovating,” Mohd Azharuddin was quoted saying.

He also reportedly said he was not surprised to hear that taxi drivers were returning the cars that they had rented from cab companies.

“This was bound to happen. The entire business model of the ‘pajak’ system is not sustainable,” Mohd Azharuddin was quoted saying, referring to the taxi rental system.

Local daily theSun recently reported that an estimated 10,000 out of 35,000 budget taxi drivers in the Klang Valley have returned their vehicles, as the contract drivers were unable to pay rental charges owed to their companies amid competition with ride-sharing service companies like Uber and Grab.

StarMetro reported the Malaysian Taxi Drivers Transformation Association (Pers1M) as saying that at least 30 per cent of cab drivers have returned their vehicles.

According to the SPAD CEO, the Taxi Industry Transformation Programme (TITP), which was approved by Cabinet in August, ride-sharing service companies will be legalised and come under the purview of the Land Public Transport Act 2010.

Both taxi and ride-sharing drivers will need to be registered with SPAD and go for Puspakom inspections. They will also reportedly carry a driver identification card by SPAD once the industry is regulated, likely by the end of the year.

“We want to make it a seamless system with only one card for everyone,” Mohd Azharuddin was quoted saying by StarMetro.

“Taxi drivers can choose to drive a taxi or register as a Grab or Uber driver, it is entirely up to the driver,” he added.