Sensible solutions for taxis and ride-hailing services – CY Ming

Sensible solutions for taxis and ride-hailing services – CY Ming

Published: 1 February 2016 7:00 AM

Deputy Transport Minister Datuk Abdul Aziz Kaprawi said the government will make it compulsory for drivers of ride-hailing services such as Uber and GrabCar to buy commercial insurance just like taxi operators in order to operate legally.

He disclosed that the Land Public Transport Commission (SPAD) is still in the midst of discussions to regulate the industry, which included making it mandatory for Uber and GrabCar vehicles to undergo periodic computerised inspections at Puspakom.

These measures were aimed at legalising the industry and regulating the operators. He said this is to ensure private vehicles are safe for people to ride in, as the number of phone apps will continue to grow.

However, it should be noted that issues surrounding ride-hailing apps and taxis are highly complicated, otherwise they would have been resolved long ago. The matters mentioned by the deputy minister need to be addressed point-by-point.

The term "commercial vehicle" is clear as these vehicles transport goods or passengers for a fee, except for vehicles rented out by car rental companies. They may be commercial vehicles but customers can only drive them for private use.

Aziz stated "commercial insurance", which is rather confusing, as the most common types cover damages to business property, third parties and workers' compensation.

If he meant commercial vehicle insurance, then there are many types.

Under the Motor Tariff for cars alone, they are categorised under Public Taxis (licensed under Teksi Bermeter or Kereta Sewa), Hire Cars – Chauffeur Driven (licensed under Teksi Limousin), and Hire Cars – Hirer Driving (licensed as Kereta Sewa Pandu).

The Motor Tariff has been in use since 1978 and for a long time, the rates were RM69.80, RM102.50 and RM122.10 for every RM1,000 cover for public taxis, limousine taxis and rental cars respectively, compared with RM26 for private vehicles.

Would insurance companies accept public taxi premiums to insure private vehicles used for Uber or GrabCar services when they are collecting much higher premiums for limousine taxis and rental cars?

These limousine taxis and rental cars look exactly like private cars and are used for chauffeur-driven services, just like GrabCar and Uber. Insurers also charge an additional RM78 for limousine taxis and RM240 for rental cars as premiums for "Passenger Risk Cover" for four adults.

Even if vehicles used for Uber and GrabCar services are covered for legal liability to passengers, those injured inside the car may not receive a single sen in compensation.

Very few people are aware that passengers in buses and taxis are not insured at all. The compulsory insurance for all motor vehicles, including buses and taxis, is to insure the driver for legal liability when sued by injured parties.

For example, passengers injured in a taxi through no fault of the driver would have to sue the driver of the other vehicle that crashed into the taxi. The same applies to a GrabCar or Uber vehicle even with "Passenger Risk" cover.

Should the driver of the taxi or private car was at fault and insured for "Passenger Risk", the insurance company could still withdraw the legal liability cover if the driver was found driving under the influence of drugs or alcohol, or violated one of the many clauses included in the terms and conditions of the motor insurance policy.

Also, injured victims would have to wait many years for the court to award compensation and receive payment from the insurance company. Under existing laws, most accident victims suffered a double blow, one for the injury and the other the long agonising wait for compensation.

The legal liability insurance should be replaced with Personal Accident Insurance (PAI) as compensations are speedily paid out without having to establish fault. A RM100,000 cover may not be adequate for the rich or high-income earners but they are likely to have their own life and general insurance.

Together with RM20,000 cover for medical expenses, many injured victims can seek treatment at private hospitals.  

What the Transport Ministry should do is to amend antiquated laws requiring all motor vehicles to be insured for third party injuries, and public service vehicles such as buses and taxis to be covered for legal liability to passengers, be replaced by PAI cover.

And the only way for private cars to provide transport for a fee legally is to amend existing laws.As all commercial vehicles are under the purview of SPAD under the Prime Minister's Department, the Transport Ministry will have to work with SPAD and not issue statements on its behalf.

SPAD was fully operational on January 31, 2011 and since inception had not added more metered taxi permits in the Klang Valley due to the oversupply. If private cars are allowed to provide transport for a fee, taxi permits should also be granted to any individual that qualifies.

Those choosing to operate taxis may purchase new vehicles with excise duty exemption but pay higher motor insurance premiums and regulated by SPAD. Drivers preferring to offer ride-hailing services using private cars are to pay excise duty and private car insurance, and regulated by phone apps.

In any case, safety is determined by many factors that affect the driver, vehicle, road, weather and traffic conditions, and not by insurance or whether the service is provided by taxi or private car.

Reducing the frequency of vehicle inspection at Puspakom from six months to a year may increase taxi driver's income for a day but at the expense of safety, particularly when taxis are old.

After the initial inspection, the first three routine inspections can be conducted once annually, and after that every six months during the fourth and fifth year. Taxis operating beyond that should be subjected to inspections every three months.

This will encourage operators to change their taxis every three or five years.

The same applies to private vehicles offering ride-hailing services. – February 1, 2016.

* CY Ming reads The Malaysian Insider.

* This is the personal opinion of the writer, organisation or publication and does not necessarily represent the views of The Malaysian Insider

- See more at: http://www.themalaysianinsider.com/sideviews/article/sensible-solutions-for-taxis-and-ride-hailing-services-cy-ming#sthash.FxA35bnJ.dpuf

Break the law, lose your vehicle by bavani m

HUNDREDS of privately-owned vehicles, including luxury cars, used for ride-share services have been impounded.

The cars, used by Uber and Grabcar, had been towed to the depot by the Land Public Transport Commission (SPAD).

The cars were impounded for illegal usage under Section 16 of the Land Public Transport Act 2010.

Some of these private vehicles have been left to rot for over a year while waiting for the courts to decide on the issue.

Some cars have even been forfeited and are waiting to be auctioned.

The SPAD impound centre in located at an secured place away from the city.

These vehicles, including commercial vehicles such as taxis, vans, stage buses, express buses, school buses, tipper trucks, lorries and garbage trucks, were seized during various operations for flouting rules such as no permits, expired licences, not using the meter, overcharging and various other offences.

According to a senior officer from SPAD’s administration department, the private cars were seized by officers who went undercover by posing as passengers after booking trips via ride-sharing apps such as Uber and Grabcar.

“Once caught, the cars will be brought to the depot and we will process the paperwork for the court proceedings.

“The case will have to be registered in 30 days, and after that, it is up to the courts to decide,” said the officer who wished to remain anonymous.

“The court proceedings can drag on for months. We even have cars that have been stuck in our impound yard for more than a year now,” he added.

Irrespective of the court’s decision, SPAD charges a daily fee for holding the cars in its depot.

According to the officer, apart from the towing charges, which are set at RM300 for private cars, the daily charge for holding a private vehicle is RM150.

“The RM150 storage fee can be a huge burden for the average man who is already facing financial problems.

“So if your car is impounded for six months, when you eventually get it back, you would have to pay a whopping RM27,000,” the officer explained.

He added that the authorities were currently processing the paperwork to auction off some of the cars.

“Once the case goes to court, we have to wait as court proceedings can take a long time.

“SPAD has no power over the time frame, but the daily charges will still apply,” he said, adding that the court would also impose its own fines.

“The fine from the court can be anything from RM5,000 onwards.

“In cases where the court decides to forfeit the car, SPAD can proceed to auction it off,” he added.

On the disposition of seized vehicles, he said SPAD would either conduct an open tender or an auction to dispose of the cars. The money will then go to the government.

StarMetro was allowed into the impound facility recently on condition that the location was kept secret. Apart from the luxury cars, a multitude of other vehicles could be seen.

The officer explained that while the ride-sharing apps were not illegal, using a private vehicle for the purpose was illegal.

“Even licensed limousines become illegal if the usage of such vehicles contravene the conditions attached to the licence,” he said.

Taxi services procured through ride-share applications are usually made up of drivers who do not have a public service vehicle (PSV) driving licence and this is an offence under the Road Transport Act 1987.

The private vehicles used by the operators of the app are also not covered under commercial vehicle insurance and do not go through Puspakom’s safety inspections.

Under the law, drivers are required to have a PSV licence and the vehicles they use must be suitably licensed by SPAD with proper insurance coverage for the protection of fare paying passengers.

Failing which, the driver risks having his car confiscated by SPAD during enforcement operations carried out by officers on top of the penalty or imprisonment as provided under the Land Public Transport Act 2010.

“We get a lot of people coming to our headquarters and begging and crying for their cars back.

“In some cases, it is their only mode of transport and there are cases of people who still have to service their loans.

“It can be very heart-breaking to see them that way, but people need to know that there are legal issues and there are risks involved when they choose to become kereta sapu drivers, but they simply choose to ignore it,” he said.