Malaysia says it'll seize motorcycles being operated as ride-sharing vehicles

A hot fledgling motorcycle taxi hailing service has hit a wall in Malaysia, after barely getting on the road.

Dego Ride found itself effectively banned from Malaysian streets on Friday, after regulators threatened to seize motorcycles belonging to people offering rides on their vehicles, local news reports say.

The penalty is an unusually stiff one, compared with other countries which have typically issued fines to unauthorised drivers from ride-sharing apps.

A director for the Road Transport Department said that over 6,000 motorcycle riders were registered with Dego Ride in the Klang Valley -- an area surrounding Malaysia's capital of Kuala Lumpur.

The ride-sharing startup was just founded in Nov. 26 last year.

It's the first of its kind in Malaysia, but far larger competitors Uber and Grab already operate UberMoto and GrabBike, respectively, in neighbouring countries such as Thailand, Indonesia and Vietnam.

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In the short time it's been up, Dego Ride has become wildly popular because of its low price -- passengers are charged RM 2.50 ($0.56) for a 3km trip, with an additional RM 0.60 ($0.13) per 1km.

Dego Ride is also unique in that it uses a rather barebones interface for its service. It doesn't have an app (yet) but requires users to text a Whatsapp number, then fill in a web form with where they want to go.

The service then sends a text notification back with the driver's whereabouts and details.

What's the government's issue with Dego Ride?

The government's main gripe about the service is that motorcycle riding is unsafe.

Dego Ride's CEO, Nabil Feisal Bamadhaj, refuted this in a Facebook chat.

"Safety was our [main] concern even before launching," he said. "If you look at the statistics, the majority of [motorcycle] accidents occur in the outskirts, and due to not obeying the road regulations."

Passengers are offered a helmet when they go on Dego Ride, and they are insured up till RM 1,500 ($337.40), while riders are vetted to ensure that their motorcycles are newer than five years old, and that they do not have driving or criminal offences.

Perhaps it's telling that neither Grab nor Uber have launched motorcycle taxi services in Malaysia. As it is, both companies struggled to push their regular car services past legal barriers, finally succeeding in August last year, when Malaysia's regulators announced it would move to legalise ride-sharing.

For now, Dego Ride has told its riders to stop offering rides to passengers, and instead look at courier jobs on the platform.

"We are in constant talks with the government and regulators, even prior to the ban announcement made by the transport minister," he said.

"The government has learned that it's beneficial for all to regulate [ride-sharing] services than ban such innovation, especially when it benefits the lower-income group."