Transport Minister: E-Hailing Fare Hike Due To Supply-And-Demand Imbalance, High Traffic Volume
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(Image: The Star)

Transport Minister Datuk Seri Dr Wee Ka Siong has said that several factors played a part in the recent surge in e-hailing fares, with supply-and-demand imbalance and high traffic volume being the key culprit. This came following claims that e-hailing fares have soared by up to 400% during peak hours. 

According to Dr Wee, the number of drivers registered with some e-hailing companies has dropped by over 30% compared to pre-pandemic times. In contrast, the demand for e-hailing services has increased since the country began transitioning into an endemic phase for Covid-19 beginning 1 April, with economic activities quickly picking up. 

“These factors have had the most effect on the fare algorithms employed by e-hailing operators (EHOs) which account for many factors, including distance, traffic volume, weather patterns, as well as market supply and demand. They all play a part in the increase in fares lately,” Dr Wee stated. 

(Image: New Straits Times)

Aside from that, Dr Wee explained that the e-hailing fare is made up of two applicable charges: the base fare and surcharge. While the government does not regulate the base fare, he said that the surcharge must not exceed two times the base fare (taking into account peak rates and fuel prices). “EHOs are permitted to set their fare structures based on their own formulae and terms of service with their consumers in a free market,” he added.

Dr Wee further said that EHOs have reassured that they will look into increasing the number of drivers so that the fares can be better regulated, following a meeting with the Ministry of Transport and the Land Public Transport Agency (APAD). There are currently more than 130,000 individuals with licences to work as e-hailing drivers, but the number is set to increase with more people applying to become drivers for 21 EHOs nationwide. 

“At the same time, the government will also continue to ensure that more EHOs along with taxis and buses are available to provide commuters with more choices,”  Dr Wee also said, adding that the government will continue to monitor the e-hailing industry to ensure fairness and to prevent consumers from being burdened by high fares. 

(Source: The Edge Markets)

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