Rising Fuel Costs Threaten Demand for Ride-Hailing and Food Delivery

E-hailing and food delivery drivers face mounting pressure from rising fuel costs, which threaten service availability and affordability for consumers across Malaysia.

Escalating fuel costs pose a significant threat to Malaysia's ride-hailing and food delivery services, with an overwhelming majority of consumers indicating they would reduce or eliminate usage if service charges continue rising.

A recent survey by Rakuten Insight reveals that 82 percent of Malaysians would alter their consumption patterns if ride-hailing and food delivery prices increase due to rising fuel expenses. The findings indicate that consumers are significantly more price-sensitive to convenience-based services during periods of financial strain, viewing fuel-related price increases as mere cost transfers without added value to justify higher rates.

Consumer Spending Vulnerability Exposed

The survey data demonstrates that convenience-based services occupy a precarious position in consumer spending priorities during economic pressure. When confronted with higher service charges, most Malaysians indicate they would resort to alternatives such as cooking at home instead of ordering food delivery, or using public transportation and carpooling instead of ride-hailing services

.

Notably, the research highlights that dining out is more susceptible to spending cuts than food delivery, suggesting a fragile recovery in the convenience services segment overall. This vulnerability reflects broader economic concerns among Malaysian households, particularly among lower-income groups and gig workers who depend on these services for income generation.

Impact on Gig Economy Workers

The rising fuel cost crisis directly impacts the estimated 164,000 registered e-hailing drivers and over 1.64 million Malaysians earning income through gig work. Industry estimates indicate that e-hailing drivers typically spend between RM1,200 and RM1,600 of their monthly earnings on fuel, consuming approximately 700 to 800 litres of petrol monthly to maintain work requirements.

The government's subsidised RON95 fuel programme at RM1.99 per litre provides critical support, but market rates without subsidy reach RM4.02 per litre—a significant disparity. As fuel subsidy costs escalated to approximately RM4 billion monthly by March 2026, the sustainability of current support measures remains uncertain, potentially threatening driver income stability if subsidy levels adjust.

For expatriates and foreign residents in Malaysia, rising service costs on ride-hailing and food delivery platforms represent an emerging quality-of-life challenge. The survey results suggest that widespread consumer resistance to price increases could prompt service quality reductions or platform consolidation, affecting availability and reliability of these convenience services integral to urban expat living.

July 29, 2026