TIS - Intelligence - Regulating a Ride-Hailing Business Constructively and Effectively

JAKARTA (TheInsiderStories) – Indonesian Government is currently drafting the new regulation on the change of ride-hailing companies into public transportations. The new regulation its expected comes out within two months from now or around May.

Recently, Transportation Minister Budi Karya Sumadi has said  Grab, Go-Jek, and others to get a license from his ministry, as they are in practice provide public transportation services.

Operators of ride hailing applications have repeatedly refused to be called as transportation companies, arguing they just provide an application to ease public transport services.

However, controversy arose as in practice, they behave like public transport operators and the legal loopholes allow them to set their own tariffs, set their own safety standard for both drivers and vehicles.

Public transportation vehicles, by Indonesia’s law, must use yellow-colored vehicle registration plates, of which in a bid to secure this, the operator must pay a special license and they must have fixed routes. For ride hailing transportation case, they will be classified as public transportation services with no specific routes.

There is another complicity in the country’s law, as it recognizes four-wheeled vehicles, or up, as public transportation means. This means the online motorcycle taxis can escape the regulation.

The upcoming regulation will also mean a more intense scrutiny for drivers of ride hailing applications. The country’s law require a specific driver license for driving public transport vehicles.

General Director of Land Transportation for Transportation ministry Budi Setiyadi explained the new policy will not revise the Transportation Ministerial Decree No. 108/2017 on non-route public transportation.

According to him, the new regulation lets the government to supervise Go-Jek and Grab and set a sanction should they make a violation.

Email: linda.silaen@theinsiderstories.com

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The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.


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