Ride-hailing services enter uncharted territory after new regulations take effect

Taxi drivers waiting for customers at Bangkok Railway Station, more commonly known as Hua Lamphong, in Bangkok. (Photo by Lillian SUWANRUMPHA / AFP)

Legalized ride-hailing taxi services, which start next month, will offer more choices, but both consumer satisfaction and drivers’ welfare are dependent on many variable factors in the post-COVID-19 scenario.

Technology disruption, consumer complaints about taxi services, and some confrontations between unregulated private taxi drivers and public taxi drivers have forced the Transport Ministry to come up with regulations.

The new rules are in line with the Cabinet resolution adopted in May allowing the use of personal cars for ride-hailing taxi services via apps, with seating limited to seven.

Early this month, Transport Minister Saksayam Chidchob announced a set of new regulations designed to regulate ride-hailing taxi services via apps.

The operators have to register with the ministry this month. So far, five or six operators have already applied, Saksayam said.

The service is expected to begin in November, he said.

Once the app operators get the license they can recruit drivers, but a driver can use only one car.

They must have a public-car driver license and pass a criminal record check by the National Police.

Among other requirements, the operator’s car must not be more than nine years old and car insurance must cover third-party liability.

The licensed cars will be provided plastic tags to be placed on the windshield and rear-view mirror, as proof of the car being registered for lawful ride-hailing service.

QR code is mandatory in a car in order to allow customers to review the quality of services.

Priority for public taxis

Public taxi drivers can register with ride-hailing apps as well as stop to pick up passengers. Personal car operators can only serve passengers who make bookings via internet-based apps.

App operators are required to give public taxis priority in getting passengers, followed by electric cars and personal cars.

Passengers have to pay a Bt20 fee for calling cabs. The fare starts at Bt40-150 depending on the type of vehicle, up from the current minimum Bt35 for public taxis.

The service cost is Bt6-16 per kilometer, plus Bt2 per kilometer during traffic jams.

Regulations for delivery services

The Transport Ministry also plans to regulate delivery services, especially those who use motorcycles.

Sumet Ongkittikul, research director specializing in transportation and logistics policy at Thailand Development Research Institute, expressed his support for the government move.

“We have been faced with the problem of unregulated ride-hailing for a while. It is time to make it clear that ordinary car owners can also provide taxi service,” he said.

It is not likely to cause any trouble in Bangkok, but there could be some confrontation between new entries and local taxi services, he predicted.

Influential taxi operators in provinces may not be happy with private car services, he said.

Nae Fuagnlikhit, who had joined a ride-hailing app and used his own car to provide taxi service before the COVID-19 outbreak, explained that previously there were two groups of private taxi services: drivers who worked full time, and those who worked only on weekends for additional income.

“If there are strict regulations and a lot of paperwork involved, I think the second group may choose to end their part-time driving,” he added.

Value for money?

“In general, new services offer consumers more choices but I am not sure if it would lead to value for money,” Sumet said. High competition may not ensure competitive prices. That also depends on how much app operators charge drivers.

Many consumers do not have a good experience with food delivery services. Having more operators was supposed to make prices competitive, but consumers sometimes complain about the high food-delivery cost, said Sumet.

Many taxi drivers have exited the business due to lockdowns, people staying at home or avoiding taxis due to fear of infection.

“Many uncertain factors would affect the welfare of the drivers. Will the economic situation post-COVID-19 improve? And will foreign tourists return to Thailand in large numbers as earlier?” Sumet posed.

Key players in Thailand

The main players who operated in the Thai market before the regulations were framed were: Grab, Line Man and Estonia’s Bolt, True Ryde, Taxi OK, HaHa taxi, Taxi-Beam, and Smart Taxi.

By Thai PBS World’s Business Desk


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