PETALING JAYA: An economist has called for the easing of entry into the e-hailing industry.
The government should not impose price controls, said Bait Al-Amanah research director Benedict Weerasena.
He said the recent surge in e-hailing fares was due to high demand and supply challenges, especially during peak hours.
“The law of demand and the law of supply interact to determine the market price of these e-hailing services,” he told FMT.
Benedict said setting a ceiling fare could bring about a situation in which fewer drivers would work during peak hours due to low returns, causing a further shortage.
“Lowering barriers to entry for new e-hailing operators will encourage new players, ensuring healthy competition in the long run.
“Similarly, the government should reduce barriers to entry for e-hailing drivers so that new drivers can come on board at a quicker pace to fill the current gap,” he said.
His comments follow transport minister Wee Ka Siong’s warning that the ministry would suspend or revoke the licences of companies violating the 200% surcharge limit.
Transport planner Wan Agyl Hassan also called for the lowering of entry barriers.
The former group operations head of policy and planning of the defunct Land Public Transport Commission told FMT the government needed to understand why there was currently a shortage of drivers.
“When we were facing the pandemic, many lost jobs and jumped into e-hailing and food delivery services. Now that almost all economic sectors have reopened, we can understand why some have left to rejoin their former or new sectors,” he said.
Dego Ride founder Nabil Feisal Bamadhaj supported Wee’s statement, saying high surcharges would burden consumers “and inevitably the entire e-hailing industry”.
He said the industry should not be deviating from its goal of making life easier for consumers and drivers.
Nabil said it was normal for companies to take the opportunity to recover losses incurred during the pandemic and the government had made a “fair move” to protect consumers.
He said he was not against giving service providers the freedom to set prices, but “this industry will eventually be buried if it pursues only profits”.