Brief: Malaysia legalizes ride-hailing in boon for Grab and Uber

Photo credit: Maks Karochkin.

The news:

• Malaysia’s parliament today passed amendments to two laws that will legalize ride-hailing services like those offered by Grab and Uber.
• The amendments to the country’s Land Public Transport Act and Commercial Vehicles Licensing Board Act effectively create a new category of license – the intermediation business license – to allow ride-hailing apps to operate legally.
• While Grab and Uber were already operating in Malaysia, their services were not technically recognized under local law.

Why it matters:

• Ride-hailing apps offered by Grab, and Uber in particular, have come under fire from the traditional taxi industry in Malaysia and elsewhere. Moreover, the ehailing business model has been scrutinized by regulators for its use of private cars, non-licensed cab drivers, and carpooling.
• However, there appears to have been rapprochement – Uber recently announced a partnership with a Peninsular Malaysia taxi drivers’ association to allow licensed cabbies to pick up fares using the US company’s app.
• More broadly, the legalization of ride-hailing could open up further opportunities for the ride-hailing giants in Malaysia. The legal change comes at a time when substantial sums are being pumped into the sector by investors and consolidation could be on the horizon.

Source: Reuters.