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How We Got Here

The cab industry in Malta has long been a subject of contention. In 2010, the Taxi Services Regulations were introduced to establish a framework for operations, including licensing and service standards. However, enforcement of these regulations remained inconsistent, leading to a proliferation of operators exploiting loopholes.

The emergence of ride-hailing platforms like Bolt, eCabs, and Uber further complicated the landscape. These platforms partnered with fleet operators who employed numerous third-country nationals as drivers and provided the platforms with vehicles.

While many were feeling the impact of a rapidly growing ride-hailing industry—particularly the pressure it was placing on infrastructure and social services—consumers were also benefitting. Rides in Malta were significantly cheaper than in most European countries, and waiting times were remarkably short. In a country where transport remains a persistent issue, cab-hailing services were plugging a gap.

However, the business model behind this industry was riddled with loopholes, many of which were not addressed as the sector ballooned. Concerns grew over tax evasion, questionable employment practices, and an oversupply of drivers, many of whom were perceived to be contributing to infrastructural strain.

In response to these issues, the government reintroduced regulations in 2023, mandating that all Y-plate vehicles be parked in Public Service Garages (PSGs) when not in use. Operators were given a 12-month grace period to comply, requiring them to submit site plans and obtain the necessary permits.

The Motives Behind the Crackdown

The government’s crackdown was driven by multiple factors because while the policies were in place, some fleet companies were finding every hole to circumvent them.

Tax evasion was one major symptom of unenforced regulations. The market model itself suggested that regulations were being ignored.

An imbalanced supply and demand ratio—where supply far exceeded demand—combined with unusually low prices raised questions about how fleet companies were managing to turn a profit, especially as their fleets continued to expand. This week, local media reported that a tax investigation found two major industry players—WT Global and TXGO—owing Malta €3 million in evaded VAT.

Exploitation of employees was also rife, with drivers allegedly being made to work inhumane hours for very little pay.

Add to this a lack of compliance with commercial garage regulations. Some companies circumvented the rule by underreporting the number of cars they operated. Others went a step further, falsely registering fields, shops, and warehouses as public service garages.

As the situation was worsening behind the scenes, public frustration was festering. Between Malta’s already-established traffic problem and an increase of Y-plates on the roads, people were beginning to direct their anger at the influx of third-country nationals in the cab industry.

In response to these growing issues, the government took action

Despite initial scepticism, the government demonstrated an uncharacteristic resolve in enforcing these regulations.

The first thing it did in July 2024 was refuse hundreds of third-country national work permits applying to work in the cab and food courier industries. This decision caused a lot of confusion among foreign workers who came to Malta expecting stability. Meanwhile, those who had been in the country for years but wanted a change of profession were similarly left high and dry.

The next step was the removal of vehicles. In January of this year, Transport Malta began confiscating vehicles en masse— 890 were blocked from apps for non-compliance, and an additional 500 were taken off the road after their supposed garage spaces were found to be fraudulent.

The licenses of major operators, including WT Global and TXGO, were revoked. These have been temporarily given back until a final decision on their appeal is concluded by the courts.

Meanwhile, operators who had shown intent to comply by submitting planning applications were given until April 18, 2025, to secure approved permits. Transport Malta emphasised that failure to meet this deadline would result in further suspensions, underscoring a “do or die” stance.

Pushback

The enforcement actions elicited varied responses with some praising the action and others fearing inconveniences. 

Major fleet operators unsurprisingly criticised the abruptness of the license revocations, arguing that no rules were broken yet licenses ceased without any explanation. They went on to say that this clampdown jeopardised numerous employees, associated businesses and even the Maltese economy as a whole.  

eCabs, Bolt and Uber received a Transport Malta notice ordering them to block 900 cabs from their apps. While it was initially believed that all platforms complied with this order, Association Y-plate later alleged that 90% of the confiscated vehicles were back on the road. 

Meanwhile, some consumers expressed concerns over potential increases in ride prices and waiting times, however, others appreciated the government’s efforts to regulate the industry and address longstanding issues.

A major impact on waiting times and prices has not yet been noted, however, it’s still a bit soon to see the full impact of the enforcement. 

Regardless of individual opinions on the measures, the government’s decisive action is noteworthy. In a country where bureaucratic inertia often hampers progress, this instance demonstrates Malta’s capacity to enforce significant regulatory changes effectively.

Looking Ahead: A Blueprint for Future Governance

This crackdown offers valuable lessons for future governance: the effectiveness of a coordinated effort.

It took an organised effort to pull off this wide-scale enforcement. One that required inter-agency collaboration and the allocation of significant resources. While that doesn’t negate the pain points of the process, like the lack of communication at the start of the crackdown, it is one of the better efforts the government has embarked on to ensure the country’s laws are being respected by industry magnates.

It remains to be seen whether these reforms will have their intended impact, or whether they will be gradually eroded under pressure from industry players. What is clear, however, is that the public now has proof that when there is political will, real action can be taken.

This serves as a timely reminder that the government is capable of implementing change when public concern reaches a critical level, then citizens should keep demanding more of it. If such an approach can be replicated, Malta could effectively address other pressing issues, from construction safety to financial regulation.

What issues would you like to see tackled with the same political will?