A Russian E-Hailing Company Has Been Operating In Malaysia Without A Licence Since 2019
Recently, the Road Transport Department (JPJ) in Penang carried out an operation against several drivers of a Russian e-hailing company that has been operating here without a business licence since last year
According to Adenan Md Isa, who is the Penang director of JPJ — which is under the Ministry of Transport (MOT) — they arrested 11 drivers and seized their cars during the two-day operation against the unlicensed e-hailing service identified as 'inDriver', a so-called decentralised, bid-style service based out of Russia.
"The recent arrests are just the tip of the iceberg," Adenan cautioned, adding that an estimate by the department shows there are "more than 200 drivers using the inDriver application in the state".
As per a New Straits Times report by Audrey Dermawan published on 25 June, the drivers, who are aged between 20 and 50, were also registered with other licensed e-hailing companies in the country.
Adenan revealed that their checks with the Land Public Transport Agency (APAD) — which is under MOT — showed that inDriver has not applied for a Business Mediation Licence (LPP) to operate in Malaysia.
Additionally, inDriver also doesn't have an E-Hailing Vehicle Permit (EVP), which has been made mandatory for drivers of any e-hailing service to transport paying passengers since 12 October last year.
The company, he said, "has been operating here for the past six months".
A check by SAYS of inDriver's local social media pages showed that the company has been advertising its services to drivers and passengers since at least November 2019.
"We believe they are operating nationwide," the Penang JPJ director told New Straits Times.
It appears the licensing department was alerted after the Malaysia E-Hailing Drivers Association (MeHDA) complained about inDriver
The association lodged a report with JPJ earlier this month, urging the authorities "to act against the company for the benefit of other legal players in the e-hailing industry".
Adenan said that after they received the information about the Russian e-hailing service, JPJ officers went undercover to understand the ins and outs of the inDriver before moving in to take action.
According to MeHDA president Daryl Chong, the association had previously warned e-hailing drivers against using the inDriver mobile app due to its "illegal status" in the country.
Chong said that registering as a driver under an unlicensed e-hailing service would mean that in case of a mishap, both passengers and drivers would not be covered by insurance while on the road.
Meanwhile, Adenan said that their investigations showed that inDriver was promoting its service to attract drivers to join them without any payment through its app, which boasts of over 49 million users.
As per a January 2020 statistics by Sensor Tower, which provides data-driven insights about the app economy, inDriver is the third most downloaded ride-sharing app in the world, behind Uber and Grab.
inDriver claims to be active in over 300 cities across 31 countries
The service is reportedly operational in countries such as Kazakhstan, Uzbekistan, Brazil, Mexico, Colombia, Ecuador, Panama, South Africa, India, Indonesia, Thailand, and the Philippines among others.
However, earlier in January this year, inDriver was accused of operating illegally in Cebu, the Philippines, by the Land Transportation Franchising and Regulatory Board (LTFRB) in Central Visayas.
According to its founder and chief executive officer (CEO) Arsen Tomsky — who has been described as Elon Musk of the Republic of Sakha (Yakutia), the e-hailing app is "for freedom-loving" individuals.
inDriver, unlike Uber or Grab, allows riders to 'haggle' the price with the drivers.
Outside Malaysia, riders propose their fare, and then drivers can negotiate. The drivers are given a preview of the routes and are charged 5% to 8% in commission. (Uber charges drivers 25% and Grab 20% to 25%.)
In Malaysia, inDriver didn't charge its drivers any commission, paying them in full.
According to the Penang JPJ director, the unlicenced service offered fares that are relatively cheaper compared to registered e-hailing services, which allowed drivers to find customers much faster.
This SAYS writer downloaded the app and was able to successfully register as a passenger in Selangor.
According to its CEO Tomsky, the premise of the service was birthed when during the new year holidays of 2012 in the Russian city of Yakutsk, taxi companies raised their prices to unaffordable levels
This led to angry students in the city, the coldest in the world, to create their own "ride-hailing group on the Russian social network known as VK", where they named the group 'Independent Drivers (inDrivers)'.
Following which, on 24 June 2013, Tomsky formalised the process and founded the company to take on the "inflexible authority of centralised taxi services" through inDriver's decentralised process.
In December 2018, the service entered the US market by launching in New York City and setting its second headquarters in Mountain View, California, where half the company leadership is now based.
Based on reports from TechCrunch, a reputable international media outlet, inDriver appears to be an authentic e-hailing company
Its 'illegal status' in Malaysia is due to the company not having a licence.
Currently, JPJ is investigating inDriver.
"We will take necessary action against them, upon the advice from APAD," Adenan said, adding that the 11 cars seized by JPJ will be kept for 30 days under Section 80(1) of the APAD Act 2010.
On the other hand, in December last year, there was a new airline company, named Scanda Sky, operating from Ipoh without a licence: