Buses and taxis are classified as public service vehicles (PSV) and those permitted to drive them must possess a PSV licence on top of the competent driving licence (CDL), which may be class D for cars and vans, and class E for large buses.
With e-hailing service being regulated and absorbed into the taxi industry, those driving private cars to pick up passengers using mobile apps granted intermediation business licence must also obtain a PSV licence.
However, another category of vehicles not in the authorities’ radar are those licensed under Hire & Drive (Kereta Sewa Pandu) and operated by car rental companies. Unlike e-hailing which is more like a new kid on the block, car rental companies have been operating in the local scene for well over half a century.
The pioneer was Acme Hire-N-Drive started by Tan Chong & Sons Motor Company, which registered 100 Nissan Cedric with registration numbers from BL 1 to BL 100. They were used in the official celebrations on 16 September 1963, the day Malaysia was formed.
In the late 1960s, several car rental and tour companies approached the Registrar and Inspector of Motor Vehicles (RIMV) to request for a new category of licence and Limousine Taxi (Teksi Limousin) permits were introduced. The level of professionalism then was high in both public and private sectors.
But commercial road transport began to go down the drain when the government started to use vehicle permits for social engineering in the 1970s, which promoted Ali Baba business and gave birth to a new breed of rent seekers that later include approved permit (AP) holders.
RIMV’s functions were taken over by the Road Transport Department (RTD) but issuance of commercial vehicle permits transferred to the newly created Road Transport Licensing Board and later renamed Commercial Vehicle Licensing Board (CVLB).
CVLB was run by politicians and permits awarded more on patronage than promoting a healthy road transport industry. Over the next decades, several attempts were made to right the wrong but failed because of government bureaucracy and lack of political will.
When the Ministry of Culture, Arts and Tourism (Mocat) was set up on 20 May 1987 and licensing of travel and tour companies introduced under Tour Operating Business and Travel Agency Business (Tobtab) regulations, car rental firms were also instructed to comply.
But the car rental business is much closer to that of taxi and bus services than tourism, as most of the customers are residents or companies that provide their executives a car at their disposal. Half of taxi passengers are either domestic or foreign tourists, but they are left out of Tobtab and rightly so.
Later, Mocat took over the licensing of Kereta Sewa Pandu and Bas Persiaran from CVLB. Under the Tourism Vehicles Licensing Act 1999, “tourism vehicle” means an excursion bus or a hire and drive car. It was less problematic under a single government agency until the Land Public Transport Commission (SPAD) was created in 2010 and became operational in 2011.
SPAD took over the licensing of tourism vehicles in peninsular Malaysia and a host of problems ensued but its officers did little to sort them out, which was reflected in its website as all available information on tourism vehicles contained only two paragraphs.
As for Kereta Sewa Pandu, the problem was further compounded with two categories of permits, one for hire and drive commercial vehicles and the other hire and drive tourism vehicles. This has confounded even large car rental operators, but no explanation was offered. With the demise of SPAD, the difference between the two is now anybody’s guess.
Although car rental and tour companies were instrumental in getting RIMV to introduce permits for limousine taxis in the late 1960s, in later years CVLB and then SPAD equated them with hotel limousines, as new permits were issued only to those who could show proof they have obtained the concession from a hotel to operate limousine service.
To prevent encroachment among hotel limousines, CVLB inserted a condition in the permit that all limousine taxis must operate from a fixed base, which is fine if permits were granted to new concessionaires operating from a specific hotel. Sadly, SPAD made no changes.
But many car rental and tour companies have been operating limousine taxis as tour cars for decades to pick up passengers from wherever they are and dropping them off wherever they want, which is a universal practice for any door to door service.
The fact that CVLB and SPAD failed to understand such a simple concept or unable to provide a solution was a clear example when government officials and bureaucracy have stifled instead of promoting businesses in this country. As a result, many limousine drivers were summoned for picking up passengers not from the base stated in the permit, causing anxiety to tourists.
Mercifully, Mocat was aware and allowed vehicles licensed under Hire & Drive to be used for chauffeur-driven in 2003, as car rental and tour operators had difficulties in renewing limousine taxi permits or obtaining new ones from CVLB.
If not, Malaysia must be the only country in the world where car rental and tour operators are not allowed to provide chauffeur-driven service to tourists, or customers must find their own way to a fixed base instead of being picked up from wherever they are.
But in August 2014, SPAD issued a statement forbidding Hire & Drive vehicles be used for chauffeur-driven service, including picking up passengers through e-hailing, and proceeded to confiscate several Hire & Drive vehicles used for the purpose.
This happened only in peninsular Malaysia where SPAD had jurisdiction while Hire & Drive vehicles in Sabah and Sarawak are under the Ministry of Tourism, Arts and Culture (Motac). So, we have two systems for Hire & Drive vehicles in this country.
Even before SPAD was reduced to Land Public Transport Agency (APAD), the Malaysian Association of Tour and Travel Agents (Matta) had been calling for licensing of tourism vehicles in Peninsular Malaysia be reverted to Motac.
It was a classic example of too many cooks spoil the soup. With tourism vehicle permits under SPAD, Tobtab licence under Motac and road tax under JPJ, all with different expiry dates, tourism vehicles were often grounded for weeks or months while individual agencies took time to renew company licences, vehicle permits and road tax.
Such bureaucracy also came with additional costs. For example, a vehicle permit may be granted for five years but maximum three years for Tobtab licences. Renewing the Tobtab licence also requires renewal of vehicle permits, which cannot standalone and automatically expires together with the Tobtab licence.
If car rental companies are not required to be licensed under Tobtab just like taxi or bus companies, then such problems would not arise. After all, taxi, bus and lorry operators are not under any ministry except to adhere to the conditions stipulated in the permits.
Another area where over regulations have stifled the industry are public buses. Regulated fares have never been introduced for excursion, charter, workers or factory buses and school bus fares were deregulated from January 2015, which was a masterstroke by SPAD.
On March 19, 2015, SPAD announced budget taxi fares be increased by 44 per cent for distance and 46 per cent for time, and to be effective as soon as taximeters are recalibrated. SPAD also announced that express bus fares will be increased by 23 per cent, from 9.3 sen per km to 11.4 sen per km, effective from May 15, 2015 but it was withdrawn before it could be implemented.
Since then, express bus operators had been in limbo and this does not augur well for the industry or passengers. Express buses do not provide essential service and hence the government has no business to exercise price control, which benefits no one.
In fact, passengers will gain more if express bus fares are totally deregulated as operators may introduce different classes of service, such as 9 sen per km for budget, 12 sen for economy, 15 sen for business and higher for luxury service.
The only bus fares that need to be regulated are for stage buses, as they provide an essential service to commuters. SPAD introduced the Interim Stage Bus Support Fund (ISBSF) to ensure stage buses continue to ply along unprofitable routes as social service, and MyBas, a scheme which pays stage bus operators a fixed sum monthly so that they are not affected by poor fares collection.
Both ISBSF and MyBas are good measures but stage bus operators suffered because of poor implementation, resulting in them getting their subsidies very late or not given the opportunity to participate in MyBas.
But what stage bus operators suffered most are popularity contests by Federal and State Governments in offering free bus services at the expense of taxpayers’ money when they are mainly taken up by foreign workers or tourists.
Malaysians whose incomes are in the bottom 40 per cent (B40) certainly need help and for assistance given to be appreciated, the recipients must feel exclusive and privileged. But the majority of the rakyat unable to use such free service will feel sore for missing out.
Instead of spending millions of ringgit to operate free bus services monthly and driving existing stage bus operators out of business, it would have been much cheaper if bus cards were issued to qualified applicants, say with a monthly value of RM100.
If all stage buses are fitted with card reading machines, cardholders could travel at any route and stage buses will run with more passengers instead of just a few, wasting resources and polluting the air. The cards can easily be topped up at selected locations and the authorities can keep track.
Although problems are largely happening in Peninsular Malaysia, it would be wise for the authorities in Sabah and Sarawak to take heed and not go down the same slippery slope, which had stifled road transport sectors through overregulation and unfair competition using state funds.
The views expressed are those of the author and do not necessarily reflect the official policy or position of the New Sarawak Tribune.
