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Politics

Malaysia mulls taxi sector deregulation

KUALA LUMPUR -- Malaysia is studying deregulation of the taxi industry in a bid to provide an equal platform for traditional operators and their technologically empowered ride-sharing rivals, local media reported on Friday.

The government authorized the Land Public Transport Commission, known by its Malay initials as SPAD, to draft a comprehensive plan for the sector, including the use of ride-sharing platforms by taxi drivers, according to Transport Ministry officials. Legislation legalizing ride-sharing platforms such as U.S.-based Uber and Malaysia's Grab could be presented to parliament as early as November.

SPAD is in charge of planning, regulation and enforcement of public transportation on land in peninsular Malaysia, which excludes the Malaysian states of Sabah and Sarawak on the island of Borneo. Sabah is the only state in Malaysia to have banned Uber.

Drivers of traditional taxis have become increasingly hostile to mobile app-based platforms such as Uber and Grab, with some clashes leading to physical violence. Protests have been held this year in Kuala Lumpur and Penang, and in December 2015 more than 100 taxi drivers filed a legal action against SPAD seeking to have Uber, Grab and BlackLane, another ride-sharing service, declared illegal.

The SPAD initiative was welcomed by Jaygan Fu, Malaysia country head of Grab, which also operates in Singapore, Indonesia, the Philippines, Vietnam and Thailand.

"We started as a taxi booking service provider as we believed that we could contribute to enhancing the taxi industry [and] improve the welfare of the drivers and the safety of passengers, hence we are committed to be part of the solution in the transformation of the region's taxi industry," Fu said in a statement.

Grab started as a service option, allowing local taxi drivers to use its platform before adding other options including private drivers (GrabCar) and carpooling (GrabHitch).

Uber also reacted positively. "We look forward to the full details from SPAD, and are excited about the prospects of ride sharing for riders, drivers and Malaysia," the company said in a statement.

Uber and Grab have gained popularity in Malaysia for offering fairer prices and more efficient services than traditional taxis. However, the ride-sharing services are unregulated while taxi drivers require permits and licenses to operate commercially. Traditional taxi drivers are notorious for refusing to use meters and for charging exorbitant fees for rides from popular tourist spots.

Within the Southeast Asian region, the Philippines was the first country to regulate Uber and Grab, in 2015. In India, the government has issued guidelines allowing the companies to operate, but these are being challenged or revised by some state governments. Ride-sharing operations operate legally in some Asia-Pacific jurisdictions, but have been challenged or banned in many others.

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