Bread & Kaya: Uber and GrabCar services legal in Malaysia?
By Foong Cheng Leong
Aug 12, 2015
– The apps appear legal under current laws, but are the drivers?
– Public transport services need to be regulated to ensure they are safe
ON Aug 7, Malaysia’s Land Public Transport Commission (SPAD) announced on its Facebook page that it had seized 12 cars alleged to have been providing public vehicle services without a licence, under Uber and GrabCar.
SPAD said it would bring the matter to court.
This is not the first time the Commission has acted. According to a March 3 report in theSun, No escape for operators violating Land Public Transport Act, 39 private vehicles that were used to offer taxi-like services through different mobile applications like Uber, MyTeksi and Blacklane, were seized.
App-based transportation network companies such as Uber have been subject to ongoing protest and legal actions around the world. Uber has been banned in numerous countries such as Australia, India and Thailand, as well as certain parts of the United States.
GrabCar and Uber are essentially a service which connect users for rides on private cars. For the purpose of this article, I’ll focus on Uber which I am familiar with. I’ve used Uber when I was in the United States and Singapore.
If you’re wondering whether Uber and GrabCar services are legal in Malaysia, there is no express prohibition under the law to have software to connect users for rides on private cars.
According to a report in automotive portal paultan.org, SPAD chairman Syed Hamid Albar said that existing laws are silent on mobile apps offering public transport services, and this meant that SPAD was finding it difficult to rein in foreign and local mobile apps such as Uber and GrabCar, which it claimed were offering illegal public transport services.
However, Uber and GrabCar’s positions are quite clear: They do not provide transportation services but merely connect their users with drivers.
In the Recital of Uber’s Transportation Provider Service Agreement, it is stated:
Rasier does not provide transportation services, and is not a transportation carrier. In fact, the Company neither owns, leases nor operates any vehicles. The Company’s business is solely limited to providing Transportation Providers with access, through its license with Uber, to the lead generation service provided by the Software, for which the Company charges a fee (“Service”).
The Company is a technology company that does not provide transportation services and the Company is not a transportation provider. It is up to the third party transportation providers to offer transportation services to you and it is up to you to accept such transportation services.
However, the problem lies with the drivers providing the transportation services. Under Section 16 of the Malaysian Land Public Transport Act 2010 (Act), no person shall operate or provide a public service vehicle service using a class of public service vehicles unless he holds an operator’s licence issued under said Act.
A person is deemed to be operating or providing a public service vehicle service if he:
(a) uses or drives a public service vehicle of a class of public service vehicles himself; or
(b) employs one or more persons to use or drive a public service vehicle of a class of public service vehicles,
to operate or provide a public service vehicle service, and
(a) he owns the said public service vehicle; or
(b) he is responsible, under any form of arrangement with the owner or lessor of the said public service vehicle to manage, maintain or operate such public service vehicle.
Based on the above definition, Uber and GrabCar do not seem to fall within the scope. Hence, Uber and GrabCar apps are legal in Malaysia.
Notwithstanding that Uber and GrabCar apps are legal in Malaysia, are Uber and GrabCar’s drivers legal in Malaysia?
Uber and GrabCar drivers can legally provide public transportation service if they are licensed under the Act.
In fact, Uber’s Transportation Provider Service Agreement (PDF) states that an Uber driver (pic above) must “possess a valid driver’s licence and all licences, permits and other legal prerequisites necessary to perform rideshare or P2P (peer-to-peer) transportation services, as required by the states and/or localities in which you operate.”
From this agreement, it is clear that Uber requires its drivers to have a valid licence to provide “rideshare or P2P transportation services” which are essentially transportation services. Drivers without such a licence are committing an offence under Section 16 of the above Act, or can even be considered as breaching Uber’s own Transportation Provider Service Agreement.
Section 16 of the Malaysian Land Public Transport Act 2010 (Act) provides that any person, not being a corporation, who commits an offence shall, on conviction, be liable to a fine of not less than RM1,000 but not more than RM10,000, or to imprisonment for a term not exceeding one year, or to both. [RM1 = US$0.25]
The court may also order the vehicle to be forfeited to the Government under Section 80(4) of the Act.
In Reza Kianmehr v. PP  7 CLJ 265, Reza Kianmehr was convicted and sentenced to a fine of RM2,000 in default of two months’ imprisonment for the offence of operating a public service vehicle service (in local terms, kereta sapu) without a licence under Section 16 of the Act. His car was also ordered to be forfeited to the Government under the same Act.
The reason for regulating public transport service vehicles is simple. We need to make sure public transport is safe to the public. Details of drivers must be recorded and they must meet the minimum qualifications.
Those who escape the system are a risk to users and those on the streets.
Assuming an accident is caused by an unlicensed public transport vehicle driver where the passenger and person on the streets are injured, would the driver’s insurance cover such injuries, or even death?
First published on Digital News Asia on 12 August 2015