The Small and Medium Enterprises Association has called on Prime Minister Datuk Seri Anwar Ibrahim and Transport Minister Anthony Loke to look into the fee mechanism applied by P-hailing companies on small businesses that borders extortion.
The government is set to meet the companies over complaints made by p-hailing riders over the reduced commission that is making life extremely difficult for these service providers. Anwar has promised to find out if the p-hailing players could pay their riders more and provide better welfare so as not to be taken advantage of by these quasi-monopolies.
Samenta President, also notes that not only the riders are finding themselves at the losing end of the commercial arrangements with the p-hailing companies. SMEs have been lamenting for years the extortionist rates charged by these players. Citing an example, he said a typical streetside stall that wants to join the platforms would need to pay a staggering 32 percent of commission to these companies. On top of that, if a stall owner is to participate in the many ‘promotions’ offered by the platform owners, they have to pay up to another 30 percent in commission, otherwise, their stalls will be less visible on the platforms than those who coughed up the extra commission.
This has resulted in most SMEs having no choice but to increase the prices of their products on these platforms to cover the extortionist commission, resulting in Malaysians paying anything from 10 to 100 percent more when buying off these platforms compared to purchasing directly with the respective merchants.
The association added that 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. And what is shocking to most SMEs is that these same players are charging as low as 8 percent in commission to larger, chain restaurant owners – indicating that perhaps these companies can be profitable at that commission level.
President Datuk William Ng, gave the example that in China, Meituan charges a maximum of 12 percent in commission while remaining profitable. And in Vietnam, he discovered that Grab subsidises heavily their transport and food delivery services. For example, a 2-km ride on a car in District 1 of 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 RM 16 on a ‘surge’ pricing. That’s 400% of the fare! Similarly, when ordered some food delivery from a local stall in Vietnam and discovered that after heavy subsidisation from Grab, an order of 5 seafood dishes cost a mere 148,000 dong (about RM 28).
He further questions are the exorbitant charges Malaysian SMEs are paying to the p-hailing companies used to subsidise businesses in other markets where these companies are trying to gain stronger market share.
The association leader has asked the Prime Minister to inquire the P Hailing when he meets them on why are Malaysian SMEs being charged up to 32 percent in commission when Meituan in China can charge as low as 5 percent (in commission).
Why are larger restaurant chains being charged as low as 8 percent while SMEs, with lower margins, are being charged 32 percent plus other promotional charges? Are Malaysian SMEs subsidising businesses in Vietnam?
- Will these companies open up their books and show the revenue, rebates and subsidies, and costs for the Malaysian market versus that of Vietnam and Indonesia?
