LAST week, Transport Minister Datuk Seri Dr Wee Ka Siong announced that new taxi and rental car licences, which have been frozen since 2016, will be reopened for application to individuals under sole proprietorship or partnership from April 18 to June 30, 2022.
In peninsular Malaysia, those interested may submit their applications to the Land Public Transport Agency (APAD). Sabah and Sarawak each have their own independent Commercial Vehicle Licensing Board (CVLB) to handle road transport licensing matters within the state.
Previously, applicants must have one to three years’ experience driving a taxi or rental car as stipulated in the Taxi Industry Transformation Programme (TITP). This requirement has now been waived by APAD to allow new players to venture into taxi service, albeit a sunset industry.
A quota of 1,000 new licences has been set for this year and more would be considered if the number of eligible applications is higher.
But with more taxis on the road, it is bound to hurt existing cabbies even more. For newcomers, will it turn out to be a great opportunity or misstep?
I drove premier taxis (HB4400 & HWB 3888) from 2000 to 2003, and a budget taxi (HWB 9770) from 2004 to 2010. As there was no increase in rates for metered fares, I wrote “Revise taxi fares to benefit all” in 2007.
Later, taxi fares were increased in August 2009 and May 2015.
Around 2009, the then CVLB for peninsular Malaysia issued thousands of taxi permits to both taxi companies and individuals, flooding the market and resulting in taxis running empty most of the time. In 2011, the Land Public Transport Commission (SPAD) took over from CVLB.
SPAD immediately froze the issuance of new taxi permits. In 2014, permits surrendered by taxi companies to SPAD were converted into Teksi 1Malaysia (TEKS1M) permits.
They were used on brand new Proton Exora. Eventually, 1,000 TEKS1M were distributed to individuals.
But it came at a time when passengers were migrating from taxis to much cheaper private cars that were easily available through e-hailing.
Even so, many cabbies continued to fix fares and choose trips while e-hailing drivers had to be in their best behaviour to avoid getting complaints.
Many hardworking taxi drivers, particularly those that have been renting permits, switched to driving private cars, got to run more trips through e-hailing and earned higher income.
Another nail in the coffin for taxis was the pandemic that have lasted more than two years and counting.
So, if you are wondering whether to apply for a taxi permit or licence, here is a step-by-step guide to help you make an informed decision, as the whole matter is not as straightforward as many people might think.
For the uninitiated, it could well be navigating through a quagmire.
Which license?
First off, you may be stumped by which licence to apply – taxi or rental car? This depends on which area you choose to operate. If it is within the Klang Valley, Penang Island or Johor Bahru City, then taxis are allowed to operate. Elsewhere, it would be limited to rental or hired cars.
Taxis are also known as taxi cabs or metered taxis (teksi bermeter) and fares are automatically calculated by an electronic meter measuring the distance travelled or time spent in heavy traffic or while stationary. Rental cars could be shared with other passengers and fares may be fixed.
Taxi types
There are three types of metered taxis – TEKS1M, budget and executive. Although their fare rates vary, the vehicle model could be the same.
When executive taxis were introduced in 2007, their fare rates were tripled that of budget taxis and were mainly stationed at large hotels.
More than four years ago, I wrote “Half-a-century of chaotic taxi services”. For example, a Toyota Innova may be licensed as a TEKS1M, budget or executive taxi.
Although different passengers may ride on the same vehicle model, the metered fares can vary greatly.
In the 2015 taxi fare revision, budget taxi fare rates were increased from 87 sen per km to RM1.25, and RM17.14 per hour to RM25.
TEKS1M fares were raised to RM1.50 per km and RM30 per hour in Klang Valley. In Penang, it went up to RM1.75 per km and RM35 per hour.
But ironically, the higher the fares, the lower the income for these taxi drivers as most passengers, including foreign tourists, would opt for cheaper budget taxis. Globally, most passengers prefer e-hailing over street hailing, not just to pay less but also for better security.
Other taxis
Apart from rental or hired cars which may be shared by other passengers especially for long outstation trips, there are also other types of taxis.
They include luxury taxi (limousine taxi) that are normally based at luxury hotels, and airport taxi authorised for a specific airport.
There is also “kereta sewa dan pandu” or “hire and drive vehicle” operated by car rental companies.
Although licensed to be driven by customers, these vehicles are also used for chauffeur-driven service. Since 2017, e-hailing service has been incorporated under the TITP.
Excise duty
Taxis have long been exempted from excise duty and rental cars from 1983. Limousine taxis were exempted once in 1990 in conjunction with the first Visit Malaysia Year.
Then, many tour operators got to drive Mercedes saloons licensed as limousine taxis for private use.
For expensive cars, more so for imported models, exemption from excise duty is a huge saving. Many Malaysians would salivate at the cheap luxury car prices in Langkawi Island, but these duty-free vehicles are not allowed to be used in the mainland for more than 90 days in a year.
So, if you are not afraid to be laughed at for driving an expensive car licensed and painted like a taxi or rental car, go ahead.
But before you proceed, there are several other factors you would need to consider, otherwise they can be a real pain later.
Vehicle inspections
After registration, the vehicle needs to be inspected at Puspakom as part of licensing procedure before road tax can be paid and the taxi on the road. In subsequent years, the taxi must undergo routine inspections but visits to Puspakom may well be one of the most dreadful experiences.
One is often greeted by a long horrendous queue upon reaching one of these inspection centres. Although taxis normally pass vehicle inspections for road worthiness, they can sometimes fail when the brakes were tested to be less effective or front wheels are slightly out of alignment. – April 19, 2022
YS Chan is Asean Tourism Master Trainer for travel agencies, master trainer for Mesra Malaysia and Travel & Tours Enhancement Course. He is also a tourism and transport industry consultant and writer.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
