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The picture shows a conventional taxi Blue Bird and ride-hailing taxi operated by Go-Car. Photo by Blue Bird Group

JAKARTA (TheInsiderStories) – The Indonesian government has decided to halt the registration of new online taxis as a move to create a healthier business environment and balance between supply and demand, a senior government official said.

Coordinating Minister for the Maritime Affairs Luhut Binsar Panjaitan said the decision for the moratorium was also aimed to protect online taxi drivers so that they have good enough income to repay their car loans.

The decision was made on grounds that many online taxi owners and drivers purchase their cars by using credit facilities. “If the number of cars used for online taxis, that could create a new problem. If the number of cars is not balanced with the demand, they may not be able to repay their car loans,” Minister Panjaitan told reporters on Monday (12/3).

He said the government has yet to make a decision when the moratorium will be lifted. He only stated that the moratorium would be lifted once there is a balance between supply and demand.

The number of fleets of online taxies, operated by ride-sharing providers such as Go-Jek, Malaysia’s Grab and Uber of U.S. has grown exponentially over the past few years. Their presence has threatened the livelihood of conventional taxis such as Blue Bird and Express. Part of the reason is that apart from a huge fleet, these ride-hailing operators offered lower tariffs and provide more convenience trip experiences.

Given this circumstance, the Indonesian Government has issued new norm on online transportation, Ministry of Transportation’s decree number 108/2017 that revises number 26/2017, aiming at controlling the fleet growth.

The norm classifies non-route public transportation into four categories: taxi-based vehicle, specific purpose vehicle (including carter, rent, company workers, residential, shuttle between), tourism vehicle and region-specific vehicle. It also sets provisions governing vehicle ownership, lower and upper tariff limits, and fleet quota.

The revised norm is designed to avoid the likelihood of the rule being challenged for discriminating online services, the primary reason why the supreme court revoked the previous regulation.

Land transportation application –based company are forbidden to give access service to the unregistered public transportation company, give access service to the individual, opening recruitment for drivers, set the tariff as well as give tariff promo below ceiling price.

Land transportation application –based company is also mandated to co-operate with a registered public transportation company, as well as give digital dashboard access to Directorate General, Head of Agency, Governor in line with their authority.

This Digital dashboard includes company identity, data on public transportation partner, data on vehicle and driver, access monitoring of tariff and vehicle’s spatial movement, consumer complain via email and phone.

The government has also set floor and ceiling tariffs that can be set by the ride-hailing service providers, as a result, the tariffs of conventional and online taxis are not much different today.