KUALA LUMPUR – A decision by regulators to let e-hailing firms Maxim and InDrive continue operations under a three-month monitoring period, starting July 24, despite prior breaches, has left a sour taste among e-hailing drivers. Stemming from this, an association is urging the government to stop showing leniency to foreign firms and prioritise the sustainability of local e-hailing operators.
The Northern e-Hailing Drivers Association (NeHDA) recently voiced disappointment with the Land Public Transport Agency (Apad) for allowing both Russian-based firms to continue operating despite violating e-hailing vehicle permit (EVP) requirements.
Its chairman, Zabidi Bahador, said leniency toward companies that disobey Malaysian laws risks eroding the integrity of the public transportation system.
“We would not remain silent as foreign firms that were proven to have flouted EVP conditions leave scot-free while adherent local firms face stricter restrictions and compliance requirements,” he said in a statement.
He argued that allowing firms to operate even after EVP expiry was not a technical issue but a flagrant breach of the law.
“At a time when foreign firms are allowed to resume operations under special monitoring, local e-hailing operators (EHO) are struggling to remain relevant and have to adhere to all guidelines. This is an imbalance that needs to be urgently rectified,” he added.
Zabidi demanded Apad enforce rules fairly and transparently, regardless of company origin. He also called for policies that support local EHOs that are proactive and act with integrity.
He urged an end to reliance on foreign players that flout local laws, saying it was necessary to “preserve the sovereignty of the national e-hailing system.”
“NeHDA believes that the e-hailing industry could develop sustainably and ethically if support is given to companies that genuinely side with drivers and national interests. We will continue to speak up to ensure that this industry does not submit to foreign powers that breach the law,” said Zabidi.
Are geoeconomic strategies at play?
The regulators’ decision has raised questions on whether Malaysia’s move is part of a broader geopolitical calculation to maintain ties with Russia. Economist Samirul Ariff Othman believes this is “highly plausible.”
Speaking to Scoop, Samirul said economic diplomacy is increasingly used as a tool for strategic alignment, especially as Malaysia joins BRICS.
“Russia, a founding BRICS member, may view the outright banning of its tech-linked firms – however justified from a regulatory standpoint – as a hostile economic gesture, particularly in a multipolar era where economic blocs are aligning based on strategic non-Western cooperation.
“Allowing Maxim and InDrive to continue operating with tightly enforced conditionalities represents a calibrated compromise. It signals that Malaysia is not blind to compliance failures, but also values geoeconomic stability and diplomatic continuity,” he said.
Samirul warned that expelling the firms could have invited reciprocal scrutiny of Malaysian-linked companies abroad or triggered diplomatic friction – risks Malaysia may want to avoid amid fragile global trade links and its pivot towards BRICS capital flows.
“Thus, while regulatory enforcement remains intact, this decision likely reflects Malaysia’s effort to project ‘regulatory maturity’ rather than abrupt punitive measures, particularly toward firms from strategic partners like Russia.”
He said giving foreign firms a “second chance” may be wise for maintaining international ties, but only if those chances are bound by strict compliance and risk controls.
“(However) from a regulatory integrity standpoint, this sets a risky precedent: allowing major violations – such as unlicensed drivers – to be resolved post-facto, which raises concerns about regulatory capture or inconsistent enforcement,” he said.
Samirul stressed that second chances must not morph into a culture of amnesty, and warned that regulators must avoid giving the impression that foreign firms enjoy more leniency than locals.
“That could erode trust in institutions and allow commercial pressure or diplomatic lobbying to dictate regulatory outcomes.
“So, while this decision (by the regulators) appears strategically pragmatic, the burden of proof must now fall on Maxim and InDrive to demonstrate sustained compliance, or face a decisive shutdown after the three-month monitoring window.”
On July 23, Apad announced that Maxim and InDrive would continue operating under a three-month monitoring period following a successful appeal against the revocation of their business mediation licences.
Apad had previously issued a notice of cancellation on April 24 to Aist Malaysia Sdn Bhd (Maxim) and ID Applications Sdn Bhd (InDrive), effective July 24, following a compliance audit that found the companies in breach of regulations – particularly for allowing drivers to operate without valid EVPs.
Both companies appealed to the Transport Ministry and were told to carry out corrective measures by July 24 to retain their licences. Scoop has reached out to the ministry for comments. – July 27, 2025