National president William Ng said that Prime Minister Anwar Ibrahim and transport minister Loke Siew Fook are scheduled to meet p-hailing industry players on Tuesday to find out if the p-hailing players could pay their riders more and provide better welfare.
“It is not only the riders who are finding themselves at the losing end of the commercial arrangements with these p-hailing companies. For years, the SMEs have been lamenting the ‘extortionist rates’ charged by these players.
“For example, a typical roadside stall that wants to join the platforms would need to pay a staggering 32% in commission to these companies,” he said in a statement today.
Additionally, if a stall owner were to participate in the many “promotions” offered by the platform owners, they have to pay up to another 30% in commission.
Otherwise, their stalls will be less visible on the platforms than those who coughed up the extra commission, he said.
Consequently, most SMEs have no choice but to increase the prices of their products on these platforms to cover the “extortionist” commission rate, resulting in Malaysians paying anything from 10% to 100% more compared to purchasing directly from the respective merchants.
“On the pretext of supporting innovation and encouraging greater digitalisation and e-commerce, these p-hailing operators have escaped regulatory oversight.
“In the process, they have victimised and enslaved the very industry they purportedly support.
“What is shocking to most SMEs is that these same players are charging as low as 8% in commission to the larger chain restaurant owners – indicating that perhaps these companies can be profitable at that commission level,” said Ng.
Ng highlighted that China’s shopping platform, Meituan, charged a maximum of 12% in commission while remaining profitable.
“Additionally, during a recent trip to Vietnam, I discovered that Grab subsidises heavily their transport and food delivery services.
“For example, a 2km ride in a car in Ho Chi Minh City cost me 21,000 Vietnamese dong (about RM4), while a similar ride from Wisma Genting to Menara Maybank in Kuala Lumpur cost RM16 on a ‘surge’ pricing — that’s 400% more than the fare in Vietnam,” he said.
Ng said encouraging greater choice and competition in the p-hailing industry was crucial.
“If that is not possible due to the monopolistic or oligopolistic nature of the industry, then it is time to consider breaking up these players by limiting their ability to service multiple industry sectors and/or to limit their commissions through legislation,” he said.