Uber & Grab Are Now Legal! Here’s What You Need To Know.


E-hailing services such as Uber and Grab were finally made LEGAL on 27 July 2017 when the Parliament passed two bills to amend the Land Public Transport Act 2010 and the Commercial Vehicles Licensing Board Act 1987.
Uber & Grab Are Now Legal! Here's What You Need To Know.
The trend of e-hailing services can be traced back to 2009 when Uber was first founded.

It was first used as an e-hailing service for existing taxi drivers but the introduction of Uber X in 2012 allowed regular drivers to drive for Uber, effectively making them taxis on their own ride.

In Malaysia, Uber holds a sizable user-base alongside it’s South East Asian competitor in Grab. Malaysians have been quite receptive to their existence and have effectively used them instead of taxis.

Previously, people had lot of complaints against these e-hailing services.

Taxi drivers sees such services as a threat to their livelihood. The taxi drivers were so outraged that they organized strikes to protest the supposed ‘interference’ of Grab and Uber in the industry.

I am sure that you have have heard reports about Malaysian taxi drivers turning hostile against e-hailing drivers and riders:

But obviously the aggression of taxi drivers didn’t deter Malaysians from using e-hailing services. Riders tend to prefer e-hailing services to taxis due to the fixed pricing by Grab and Uber as well as the perceived ‘bad attitude’ of taxi drivers.

Now that the bills have been passed, here are a couple of key areas to take note of:

#1 A licence is required to operate
Uber & Grab Are Now Legal! Here's What You Need To Know.
These amendments make it a requirement for operators like Uber and Grab to own an ‘intermediation business licence’ which will be issued by a regulatory body (The Land Public Transport Commission (SPAD) for Peninsular Malaysia or the Commercial Vehicles Licensing Board (CVLB) in Sabah and Sarawak.) These licences are renewable, but they cannot be transferred or reassigned.


Under the amendments, it is now an offence for any person to assault, hinder or obstruct those involved in e-hailing services. Any convicted individual may be liable to a fine of RM 1,000, imprisonment not exceeding three months, or both upon conviction.

#2 There will be a body overseeing such e-hailing services

E-hailing services such as Grab and Uber tend to have minimal oversight due to the decentralized nature of their business models.

Taxis are actually governed under SPAD and CVLB alongside buses and trains. These organization serve as a governing body which keeps the public transportation in check.
Uber & Grab Are Now Legal! Here's What You Need To Know.
Grab and Uber did not have an oversight mechanism as the only check was the ‘rating’ system employed against individual drivers. There are also no real sanctions are imposed besides skipped over for rides and lack of incentives.

With the passing of the amendments, this issue will now be rectified when the E-hailing services would be placed under the jurisdiction of SPAD and CVLB. But it remains to be seen how the enforcement of these changes will be but on paper.

#3 The standards of an ‘eligible’ driver and vehicle

Previously, Uber and Grab had pretty low requirements on vehicle checks before a driver registers to be driving for the e-hailing service. This means that vehicles were not subject to vigorous safety and standards tests that taxi drivers were subject to.
Uber & Grab Are Now Legal! Here's What You Need To Know.
High mileage vehicles face a lot of wear and tear may be lacking in several important pieces of equipment such as a spare tyre or a life-saving equipment in case of an underwater submersion.

Now that Uber and Grab are legalized services, the drivers are most likely subject to the same requirements as taxi drivers, and there may be vehicles which fall below safety and regulatory standards. Future drivers would most likely be subjected to this while existing drivers may not be, since it would be impractical to do so.

#4 Insurance policy is still absent

Since Uber and Grab act in the oversight capacity and rather de-centralized in nature, there isn’t any insurance for the passengers who use these E-hailing services.

Taxis are under a contract with the taxi company, making them a viable target for an insurance claim by way of vicarious liability (a legal concept allowing for the suing of a company due to the actions of an employee).
Uber & Grab Are Now Legal! Here's What You Need To Know.
Now, the agreement between the e-hailing service operators and the drivers is just a contract for the use of the app. It is NOT an employment contract, which means that the drivers may not be able to claim for accidents/damages that occur over the course of their business.

It is unclear how the new amendments would help address this matter, but considering that the exact contract between the drivers and the e-hailing services remains unchanged, it is likely this issue would remain unresolved.


Despite the legalisation, there are various issues which have yet to be resolved adequately in terms of the law as well as the various rights of the consumers who use these E-hailing services.

It is clear that while the government has taken a step forward by legalizing E-hailing services, the ends must be tied up properly in order to safeguard the interest of riders as well as the legitimacy of the operators of such services.