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On Tuesday 25 May 2021 at its regular weekly meeting, the Thai Cabinet approved the Department of Land Transport’s draft Ministerial Regulation (“Regulation”) that will open the way for ride-hailing companies to register for an operating license. This will allow drivers to register their personal vehicles (with a maximum capacity of seven people) as taxis to be used with such ride-hailing applications. This move finally clarifies the status of and gives legal recognition to such drivers who for years had been operating in a legal gray area. Typically, their personal vehicles doubled as taxis used by ride-hailing applications such as Grab, Lineman or Gojek but the drivers were technically unable to provide such services legally. Transport Minister Saksayam Chidchob indicated that the Department of Land Transport would finalize plans to implement the regulation within a month and hold a public hearing before the draft regulation enters into force and is officially published in the Royal Gazette. The Minister said that the move will benefit the public as it will give people more choices.

Vehicle Licensing Requirements

Under the Regulation, drivers wishing to register their vehicles and secure the relevant license must:

• Hold a valid driving license;
• Pass a criminal background check;
• Have a vehicle less than nine years’ old that has no more than seven seats, equipped with a fitted communication and GPS system;
• Display a sticker of the ride-hailing company on the vehicle; and
• Only work with ride-hailing services duly registered with the Department of Transport.

Vehicle Types

Vehicles are divided into three categories: small, medium and large. Small vehicles cover cars like a Honda City or Nissan March, medium is for vehicles such as a Honda Civic or Toyota Altis while the large category covers vehicles such as a Toyota Fortuner or Honda Accord for example.

Fares

Fares for small and medium vehicles are capped at THB 50 for the first two kilometers and no more than THB 12 baht for each additional kilometer.

For large vehicles, fares are capped at THB 200 baht for the first two kilometers and THB 50 maximum for each additional kilometer.

While the vehicle is stationary or the ride is stuck in traffic, the rates will range from THB 3 to THB 10 depending on the vehicle class.

Opposition to the Regulation

There are currently about 83,000 registered taxis in Thailand and expressions of dissatisfaction has mainly come from their established representative taxi groups like the Federation of Thai Taxi Workers. Its chairman Krengkrai Kaewket speaking on behalf the organization criticized the Regulation for its lack of fairness in terms of the vehicle classes now allowed to operate as taxis whereas they had earlier been forced to use certain types of vehicles with higher operating and maintenance costs on passenger safety ground.

Conclusion

It will take another month before the draft Regulation takes effect and further consultations with the public, affected taxi groups and ride-hailing giants may result in changes as it goes through the public consultation process and clears all hurdles before entering into force. It serves as a victory of sorts for major ride-hailing companies in Thailand, after having spent years campaigning for such regulation. This significantly boosts their legitimacy and more importantly will give legal recognition to ride-hailing application drivers who will soon be able to apply for licenses and provide their services legally.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

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Kraisorn Rueangkul Partner [email protected]

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