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Grab warns Malaysia to brace for higher fares and longer waits

New license law to sideline majority of drivers when it takes effect Saturday

Nearly a quarter of Grab drivers have given up on obtaining a public service license.   © Reuters

SINGAPORE -- Malaysia is requiring drivers for ride-hailing services to obtain the same commercial license held by taxi and bus drivers starting Saturday, a move that could severely reduce available vehicles nationwide and lead to higher fares and longer waits.

Grab, which has close to a monopoly over Malaysia's ride-hailing market, said only 41% of its 150,000 drivers had such licenses as of Wednesday. Many are still taking the necessary classes or have not yet taken the exam, and 22% had given up on obtaining the qualification altogether.

Since fewer drivers will be available, Grab warned "consumers will feel the pinch of longer waiting times, especially during peak hours and on rainy days," and is urging customers to book rides earlier than usual.

The government initially aimed to enact the rule in July in order to level the playing field for the ride-hailing companies and taxi operators. But with drivers slow to comply, it postponed the move by three months to minimize disruptions.

Grab on average receives 1 million ride bookings a day in Malaysia, with an average wait time of 6 minutes or less.

The company was founded in 2012. A reduction in its fleet is expected to boost fares, especially during the morning and evening rush hours, which in turn could drive customers away.

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