Malaysian authority launches undercover operation to enforce self-employed drivers to register for social security protection

400 officers will go undercover as prospective riders in this month-long operation.

Photo credit: Unsplash

Malaysia’s Social Security Organization (Socso) started yesterday an extended operation throughout the whole of August to compel self-employed drivers to register for a social security protection scheme, according to local news outlet The Star. 

The move could potentially affect drivers who work for ride-hailing companies like Grab, as all self-employed drivers, regardless of whom they drive for and whether they are on the road on a full-time or part-time basis, must register with Socso under its Self-Employed Employment Injury Scheme (SEEIS) for protection and insurance, as dictated by The Self-Employment Social Security Act 2017 (Act 789), which came into effect on June 1, 2017.

The operation, called Ops Patuh, was launched because of the low rate of registration. According to Socso, only 35,737 or roughly 10% of 350,000 drivers in the country had registered and made contributions even though the act was passed two years ago.

On the other hand, drivers must also obtain a Public Service Vehicle (PSV) license to be able to operate in Malaysia.

The operation will involve over 400 Socso officers in the Klang Valley going undercover as prospective riders. The officers will be issuing warning notices to unregistered self-employed drivers. Those who fail to prove its registration within seven days after receiving the warning will face a fine of minimum MYR 1,000 (USD 240). Socso didn’t specify if this operation will be extended to the rest of Malaysia.

According to Socso’s official website, the failure to register is considered an offense under the Self-Employment Social Security Act 2017. Offenders can face up to a fine of MYR 10,000 (USD 2,407) or imprisonment for a term not exceeding two years.

SEEIS is a governmental initiative to ensure that self-employed drivers can also be protected under social security like every other worker in Malaysia, however, the success will depend on the acceptance of the drivers, Socso deputy chief of operations John R. Marin said.

The scheme offers a range of benefits, from medical benefits to access to facilities for physical and vocational rehabilitation.

Even then, the drivers’ acceptance can be difficult to obtain, as the scheme requires a monthly or yearly contribution from the drivers. Cost is another significant factor, as the high price of a PSV license resulted in many drivers deciding to leave the industry.

Becoming a ride-hailing driver is proving to be demanding in Malaysia as the government steps in to regulate this industry.

The country’s transport ministry recently adopted a soft-landing approach to regulating the industry by providing the drivers an additional three months to meet all requirements, a move likely resulting from the dissatisfaction surrounding price hikes. It is unsure if the transport ministry will provide yet another extension to the new October 12 deadline.

Indonesia took multiple revisions over two and a half years to pass regulations for the ride-hailing sector. Given the extension of the deadline and the recent implementation of Ops Patuh, it appears Malaysia still has a long way to go before regulations can be firmly executed and adhered.