Malaysia has one of the highest car ownership rates in the world with the number of vehicles outnumbering the population. It is small wonder that traffic congestion and mobility are plaguing issues.

For ride-hailing company Grab, this situation creates a supply of drivers and passengers. On the one hand, many people own private cars that they can use to generate extra income; on the other, many rely on Grab for mobility due to an inefficient public transport system that causes traffic congestion.

Today, Grab dominates the ride-hailing landscape in Malaysia, with over 100,000 ride-hailing drivers and 20 million registered users.

From housewives to the unemployed, many people are attracted to becoming Grab drivers due to a flexible and convenient work arrangement and, most importantly, the opportunity to generate extra income around the clock to combat economic pressures.

According to a study, most gig workers strongly prefer job flexibility; their status as informal workers gives them the flexibility to work anytime and as many hours as they can to maximise their income.

However, despite Grab’s market valuation of over $10 billion and its status as Southeast Asia’s most valuable startup, Malaysian Grab drivers faced problems of stagnant fares amidst rising costs of living and a lack of comprehensive regulations to protect their welfare.

Classified as independent contractors, Gig economy workers are not covered under the country’s Employment Act 1955. This classification also means that, unlike conventional employees, gig workers are prohibited from forming unions under the Trade Union Act of 1959.

Even if they were permitted to, Malaysia’s trade union laws are very restrictive: unions require employers’ recognition to be formally established, no general unions are allowed, and members must be employees of a particular industry, establishment, and occupation.

Without the right to unionise for better working conditions, Grab drivers are left with only one choice: forming associations to make their voices heard. These associations play the role of facilitating mutual aid, communication, and stakeholder engagement. 

While more limited than unions in many ways, associations are also free from some of the restrictions on unions. In addition, although associations are not legal entities and do not have formal recognition, they are not prevented from representing their members in collective bargaining or lobbying the government.

A Communication Platform for Drivers’ Woes

Jose Rizal joined the gig economy by chance. He had lost his job in 2016 and was left unemployed. The following year, he encountered a Grab “partner” (meaning driver) sign-up initiative at a local eatery and decided to become a ride-hailing driver.

He is currently the chief activist of the Malaysian E-Hailing Welfare Association (Persatuan Kebajikan E-Hailing Malaysia, PKEH). The 4,000-member association was formally registered as an association in January 2020, at the beginning of the Covid-19 pandemic. 81% of their members are Grab drivers. 

PKEH is also part of a loose ride-hailing driver coalition established in August 2020, the Malaysia E-Hailing Coalition (Gabungan E-Hailing Malaysia, GEM). In the same year, GEM launched a complaint channel for drivers in dispute to seek help and resolution, and coalition members can volunteer to take up and resolve the case. 

One of the main issues faced by drivers is unfair deactivation – in other words, being unilaterally dismissed by Grab with no recourse to appeal – due to disputes with customers. Rizal said, “Sometimes, passengers can be really picky and have little empathy for Grab drivers who spend long hours on the road. The operating platform tends to favour the passengers without considering drivers who have to endure horrible traffic, passengers’ complaints, and unfair compensation.” 

A driver’s income and job prospects are subject to customers’ satisfaction. Unhappy customers have full power to give low ratings or file a complaint to penalise the driver, which affects incentives or may even cause drivers to be banned permanently from the app.

In 2020, PKEH helped to resolve Grab driver Ivy Loh’s unfair dismissal; she had an argument with a client that brought too much luggage. Over a period of 2 years and seven months, she endured a lengthy legal process — from the Labour Courts to the Appeal Court — with the assistance of her lawyer and PKEH members to successfully be reinstated as a worker.

Unfortunately, PKEH closed down this channel of assistance after 11 months as they lacked the capacity to handle so many complaints of varying natures. Now, the coalition focuses on lobbying the government to strengthen and amend the e-hailing industry regulations in Malaysia.

Besides picky customers, Grab drivers are also at the mercy of the automation and surveillance mechanisms of the app. Rizal explained, “The platform operator uses AI to their advantage. Once the drivers go online, the system captures their availability, and drivers are forced to ‘auto-accept’ pickups despite fluctuating fares.”

Whenever drivers are online, the app “auto-accepts” pickups along the way, which is why drivers stay on the road for hours with no rest. To make matters worse, driving in Malaysia’s urban areas means enduring horrible traffic congestion and dismal road conditions. Drivers are stuck in a congested area, yet they are still accepting pickups along their journey, further extending their time on the road and stressing them out.

Despite being able to earn higher fares during peak traffic hours, some Grab drivers turned off the app or ignored passengers’ requests because the incentives were no longer attractive — resulting in exorbitant fare hikes.

Grab adopts dynamic fare pricing that relies on current supply and demand: fare prices increase when demand for service is high and vice versa. It is no wonder fare prices fluctuate when the supply side takes a hit.

Iskandar, another PKEH activist, said, “Some customers will be angry at us drivers because of Grab fare hikes, but these prices are regulated by AI and the dynamic pricing mechanism. At the end of the day, customers are still able to opt for cheaper alternatives, but drivers have to accept any given fare rates.”

Rizal also raised concerns about how in-app features like “Buy Now Pay Later” or “Grab Cash Financing” can be used to exploit drivers’ data on the platform to manipulate pricing. He said, “As an e-hailing operator, Grab has full power to determine drivers’ wages and ride fares according to current economic situations.”

Many users and drivers are unclear about how this pricing mechanism works – not even the Land Public Transport Agency, a national statutory body that regulates and enforces rules for land-based public transport. 

Although Grab operates as a tech company, its private car ride-hailing services were regulated in 2019 as a transport company under the statutory body to “level the playing field with the taxi industry”. All e-hailing drivers must obtain a Public Service Vehicle licence, e-hailing insurance, conduct annual vehicle checks, and more — like a taxi.

The e-hailing industry may have adopted the technicalities of conventional taxis but not the fares. Despite standard taxi rates having increased to USD 0.27 (RM1.20) per kilometre today, e-hailing rates remain at USD 0.16 (RM0.70) to USD 0.21 (RM0.90) per kilometre, which is the rate implemented for the former in the 70s.

These regulations do not necessarily improve the drivers’ situation. Drivers have to fork out more money for servicing, maintenance and all sorts of licences — it seems like the company can offload the responsibility of maintaining “workplace safety” to the workers.

Talking more generally, Iskandar also said that he thinks the government’s regulations for e-hailing platforms are inadequate, as they essentially just “copy-paste” from the traditional taxi industry. 

“Members of Parliament are still using conventional methods to approach an unconventional industry,” he said. Instead, “they have to adopt a forward-thinking method to tackle our problems to ensure that we can adapt to Industrial Revolution 4.0”, – referring to the changes brought about by digital technologies and automation.

The leadership of GEM is focused on lobbying the government because they believe that better e-hailing industry regulations can improve gig workers’ conditions — fares, social security, and job prospects. They gather feedback from coalition members, compile it, and bring it to the government.

Knowledge Sharing and External Engagement

Azril Ahmat, a Grab driver, is the Vice President of Grab Drivers’ Association Malaysia (GDMA), an association with about 300 members. 

Just like PKEH, GDMA was formed in 2017 to function like a union and struggle against any unfair or unreasonable demands from the company. Back then, Grab and Uber were the only e-hailing operators in Malaysia; these companies were free to set or impose any rules as there weren’t any regulations until 2019.

Azril was appointed Vice President due to his work supporting other Grab drivers. He explained, “Before joining GDMA, I was teaching drivers methods to avoid spending too much time on the road while maximising their income. I would organise monthly classes at eateries, and I managed to build a good rapport with drivers through that.”

Azril compiles his knowledge with bits of information from other drivers and imparts it to the drivers in his classes. He said, “Grab drivers have to understand the lifestyle of Kuala Lumpur citizens – from public holidays to working schedules – in order to hit the daily income targets these drivers have set for themselves.”

He added, “I also taught them how to manage their finances. Since drivers receive their pay in cash daily, they have to be more vigilant in their spending to ensure they can pay for bills and other commitments every month.”

He has taught more than 2,000 drivers, with 50 to 70 people attending every class.

As a part of GEM, the loose coalition, GDMA worked closely with PKEH and other drivers’ associations to engage with the government.

There are about 29 other e-hailing providers in Malaysia, such as MyCar, Maxim and AirAsia Ride. To gain a competitive edge and attract customers, these companies resort to lowering fares through different pricing mechanisms, but drivers are the ones that bear the brunt of low fares. 

Grab drivers have seen ride fares decrease by 50% to 60% in just a few years due to fare restructuring, which is why most Grab drivers work two or more jobs to supplement their income. 

Azril attributed the drastic drop in Grab fares to the free market. “E-hailing companies can enter the market with minimal requirements, resulting in stiff competition. Every operator offers low prices to make themselves more competitive. This is good for the customers but bad for the drivers,” he said.

The coalition demands the government set a ceiling and floor price for e-hailing fares to ensure better wages. This floor price is, of course, to prevent fares from falling too low. But the associations also want a ceiling to prevent customers from opting for other alternatives, such as taxis, if Grab prices increase too much.

Azril blamed the government for letting market forces determine e-hailing prices. He added, “The government definitely has the power to determine a ceiling or floor price, but they refuse to do so because they fear that it will turn foreign investors away. I heard from Grab driver friends from Thailand and Indonesia that the Grab prices there are about 30% to 40% higher than Malaysia’s.” Thailand’s cost of living is 11% higher than Malaysia, while Indonesia’s cost of living is 10.4% cheaper than Malaysia’s. 

Previously, GDMA and other associations worked with the government to enact an E-Hailing Act in 2018. Still, discussions were either stalled or delayed due to bureaucratic hurdles and a lack of cooperation. The question remains: does the government have the political will to enact pro-workers policies?

Pro-employer politicians and a neoliberal policy-making approach are major obstacles to developing regulations that benefit the drivers. The entire process can take up to six years, from conducting studies to tabling results in Parliament and gazetting them. 

Besides time constraints, inflation and rising living costs also remain substantial economic problems in Malaysia, where the price of goods can increase by 50% to 200% in just two years. Therefore, policy drafts based on research from a few years ago may not accurately capture current economic situations and could be outdated as soon as they are circulated.

Making Demands Heard

With a relatively simple registration process and no corporate interference, forming an association is not difficult; organising enough power to make Grab drivers’ demands effective is an uphill battle. 

Under GEM, drivers of various associations share similar demands: better and fairer wages, more comprehensive regulations for the e-hailing industry, and a robust support system for gig workers to transition to formal employment or running their own businesses. 

Have these associations considered merging? Rizal said, “No, because [multiple associations] make drivers’ voices louder”, while Azril thinks that “it’s the differing opinions and ego of association leaders that make merging difficult.”

Nevertheless, there have been some small successes. In 2018, GEM and various other associations successfully pushed for Grab to implement a USD 0.69 (RM 3.00) penalty for passengers that are more than 5 minutes late for their ride and a rise in the minimum fare from USD 0.67 (RM 3) to USD 1.12 (RM 5). 

The penalty for late customers was an important issue for drivers, as; as Azril explains, “Before implementing the penalty, there were cases where passengers had purposely called for a Grab long before they were ready to leave, and the drivers had to wait a long time.” Securing the penalty and the minimum fare was a long and challenging process that involved many trips to Grab’s office and unsuccessful attempts to speak to Grab’s higher management team; drivers could only meet a Grab representative. 

There are many ways to tackle issues like this: they start by initiating discussions with Grab, then proceed to seek professional legal advice or bring it up to the Minister of Human Resources.

The drivers also stand to benefit from the 2023 National Budget. The government pledged to contribute 80% to a mandatory social security scheme coverage for self-employed workers to protect them against employment injuries and provide upskilling programs for gig workers — a small part of GEM’s demands.

Contrary to many countries where regulations for e-hailing operators are non-existent, it seems like the Malaysian government is generally willing to engage and listen to Grab drivers, but change comes too slowly. 

Both PKEH and GDMA are unsatisfied with the progress in securing better welfare and job security for Grab drivers. Azril said, “We drivers have attended numerous workshops and roundtable discussions organised by the government, but there are little changes even though we provided them with plenty of ideas and solutions.” 

Azril also expressed disappointment at a lack of support from the public and Grab drivers themselves: “Our associations need full support from drivers and the public. Malaysia has about 100,000 Grab drivers, but I think that only 10% of them fully support what we do. Some drivers also think that joining an association will not help with anything.”

When asked about their strategy and approach to demanding better fares and benefits, these associations prefer discussions and engagement, with strikes being the last resort. Azril said, “We prefer discussions and engagement, although our demands are rarely taken into consideration. Our goal is to have better e-hailing regulations to benefit the users, drivers and the company, which is why our strategy is to focus on lobbying the government.”

Grab drivers also worry about going on strike because they will lose their income. 70% of e-hailing drivers in GEM are middle-aged individuals (35 to 45 years old) with families to feed. In Malaysia, Grab strikes have mainly been initiated by food delivery riders, not drivers. Some leaders from the drivers’ associations did provide minimal help to coordinate the strikes, but they refused to discuss their role publicly.

Rizal feels that the welfare and prospects of drivers are very uncertain. He said, “We will continue pressuring the government to pay attention to the industry so that drivers can continue to work as Grab drivers and earn decent pay, not just as a side income or as a quick solution in desperate times.”

This year, GEM is working closely with The Human Rights Commission of Malaysia (Suruhanjaya Hak Asasi Manusia Malaysia, SUHAKAM) to push the government to establish a Gig Workers Act.

Rizal said, “We want better e-hailing policies that are ‘pro-people’ – the drivers and the customers – instead of the capitalists. When the policies allow capitalists to dictate fares and take up a huge portion of the profits without compensating the drivers fairly, this creates a problem.”

Note: In January 2023, Grab revised their fares to ensure that drivers would be compensated adequately during rush hours (7 am – 9 am, 5 pm – 8 pm), even for short distances. The company introduced a “far pickup” bonus, hourly cashback, and a time–based fare that increased the fare per minute from USD 0.04 (20 cents) to USD 0.10 (43 cents) — while fare per kilometre was reduced from USD 0.16 (70 cents) to USD 0.06 (25 cents). Some Grab drivers are not satisfied due to a 65% drop in earnings per kilometre and insist that congestion is infrequent and mostly happens only in urban areas.

For A Participatory and United Movement

Azril and Rizal represent different views: one holds a more corporatist perspective, while the other realises how the system is skewed in favour of the capitalist. But these associations share a common goal of influencing policy-making to improve drivers’ welfare.

Yet the structure of these drivers’ associations has similarities with Malaysia’s restrictive union laws — no general unions allowed, and members must be employees of a particular industry, establishment, trade and occupation — which hinders solidarity and cooperation.

Ordinary members do not play a very significant role in decision-making. Workers must organise and build solidarity to fight for their rights through collective institutions like the drivers’ associations. But these institutions should themselves be made more participatory and accountable to the needs of workers.

Despite GEM volunteers’ applaudable efforts to solve drivers’ issues on a case-by-case basis, it is not a sustainable effort in the long term given its limited resource. Drivers and riders should consider merging into one huge association to make their voices louder to tackle the underlying issues of the gig economy: unstable jobs, exploitation through digital platforms and the lack of job security.

(Photo: Yahoo)