Samenta appeals for govt to investigate exorbitant P-hailing commission charges

KUALA LUMPUR - The Small and Medium Enterprises Association (Samenta) Malaysia hopes the government would investigate why p-hailing companies are charging small and medium enterprises (SMEs) up to 32 per cent in commission against only five per cent in other countries.

National president Datuk William Ng said that Prime Minister Datuk Seri Anwar Ibrahim and Transport Minister Anthony Loke 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.

"But it is not only the riders that are finding themselves at the losing end of the commercial arrangements with the p-hailing companies.

"For years, the SMEs have been lamenting the extortionist rates charged by these players, for example, a typical streetside stall who wants to join the platforms would need to pay a staggering 32 per cent of commission to these companies,” he said in a statement today.

Additionally, if a stall owner is to participate in the many ‘promotions’ offered by the platform owners, they have to pay up to another 30 per cent 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 per cent more when buying off these platforms compared to purchasing directly with the respective merchants.

"On the pretext of supporting innovation and encouraging greater digitalisation and e-commerce, these p-hailing operators have escaped regulatory oversight, and in the process, victimising and enslaving the very industry they purportedly support.

"What is shocking to most SMEs is that these same players are charging as low as eight per cent in commission to larger, chain restaurant owners - indicating that perhaps these companies can be profitable at that commission level,” said Ng.

He highlighted that China’s shopping platform, Meituan charges a maximum of 12 per cent in commission while remaining profitable.

"Additionally, on a recent trip to Vietnam, I discovered that Grab subsidises heavily their transport and food delivery services.

"For example, a two-kilometre ride in a car in Ho Chi Minh City cost me 21,000 Vietnamese dong (about RM 4), while a similar ride from Wisma Genting to Menara Maybank in Kuala Lumpur cost RM16 on a ‘surge’ pricing; that’s 400 per cent of the fare in Vietnam,” he said.

Ng emphasised that encouraging greater choice and competition within the p-hailing industry is crucial.

"If that is not possible due to the monopolistic / 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 via legislation,” he said. - BERNAMA