Malaysian e-hailing industry sees strong growth in 2018

Goh (right) said Grab Malaysia is positive about the new regulations put into place, allowing e-hailing service operators to function within a legal framework. — Bernama pic
Goh (right) said Grab Malaysia is positive about the new regulations put into place, allowing e-hailing service operators to function within a legal framework. — Bernama pic

KUALA LUMPUR, Dec 27 — The Malaysian e-hailing industry is projected to experience strong growth next year with increased demand expected on the back of a rising urban population, Sunway University Business School economics professor Yeah Kim Leng said.

“This scenario is supported by traffic congestion, last mile connectivity and access to the expanding public transportation system especially the MRT system in Klang Valley,” he told Malay Mail in an interview recently.

He said besides increased convenience, e-hailing services are believed to attract reliability and lower cost compared to the traditional taxi industry in the nation.

“Another factor underpinning its demand is rising fuel prices which will encourage budget conscious commuters to opt for cheaper means of getting around.

“Incentives thrown in by e-hailing companies as they up the stake to garner market share will also encourage more users,” he said.

Yeah said the high rate of mobile phone and internet usage has spurred online e-commerce and delivery of services that coupled with seamless and secure payment and settlement platforms.

“These advance services have enabled e-hailing and ride services to be integrated with the changing lifestyle and spending patterns of growing tech-savvy consumer base,” he said.

Yeah explained that the pervasiveness of mobile technology and user-friendly applications are the key factors in supporting the e-hailing industry’s rapid expansion.

Grab Malaysia country head Sean Goh said the company is positive with the new regulations put into place allowing e-hailing service operators to function within a legal framework while levelling the playing field for taxis.

“Malaysia's parliament on July 27, passed two bills that will legalise e-hailing services as ride-hailing firms Grab and Uber Technologies Inc race to expand in the region.

“We are positive about the regulations, and it gives a lot of official recognition not only to us as a group but also to the drivers who have been working very hard everyday and driving with good services,” he said.

Goh said as for fees and taxes, which are expected to be increased and implemented next year, “we think the regulators and Transport Ministry are quite supportive and well aware if there is any additional cost in the system, it will eventually burden the drivers or passengers.”

The government is quite sensitive to the issue and will try to work out something to reduce the burden for everyone involved, he said.

Asked on the e-hailing market outlook for next year, Goh said the potential market is huge and it is expected to have strong growth due to the transport landscape today.

“Most people are still driving and this is what we see as a giant trade-off between public transportation and private car ownership. The utilisation rate is relatively low and this is such a waste for car owners. Hence, we see the potential for e-hailing market to grow,” he said.

Nonetheless, the rise of ride sharing is another trend which is expected to attract more passengers next year, Goh said.

“What we look forward for next year is basically the acceptance of the ride sharing idea. This is going to be a gradual shift but that shift is going faster than we expected,” he said.

Goh said in a nutshell, the group will continue to improve its existing services starting from the in-car experience, driver service and the services provided to its drivers.

“We are also looking forward to reduce pickup friction and waiting time as recently we have tied-up with our new partner, Sunway Malls.

“The launch of our first lounge at the main entrance of Sunway Pyramid will improve the overall ride experience for Grab customers, and also provide a safe, convenient and affordable transport service,” he said.

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