Indonesian Government to Revises Online Transportation Rule

Photo: Special

Jakarta (TheInsiderStories) – The Indonesian Government is going to launch new norm on online transportation, which aims to manage the mushrooming of online services like local ride-sharing Go-Jek, Malaysia’s Grab and U.S’s Uber. The new regulation is expected to be enforced starting Nov. 1.

The norm will contain provisions governing vehicle ownership, lower and upper tariff limits, and fleet quota. The norm’s official designation is intended to avoid the likelihood of the rule being challenged for discriminating online services, the primary reason why the supreme court revoked the previous regulation.

The revised Ministry of Transportation’s decree number 26/2017 stipulates that tariff and fleet quota on land transportation will be decided by land transportation directorate general, in accordance with initiatives from toll road agency and related local governor.

Budi Karya Sumadi, Minister of Transportation said on Thursday (19/10) revised decree has include some point recommended by Supreme Court. Yet, it add three important things including driving licence requirement mandatory, insurance scheme, as well as registration mandatory to Ministry of Information and Communication for such online based transportation application.

Tariff ceiling will be determined in order ensure that drivers receive enough income for car’s maintenance or loan installment.

“The low tariff practice make lost to company so they have insufficient capital to buyback their taxi for example. In contrast, we want every transportation business, whether for short term or long term have to be safe and sustain,” Sumadi said.

While foor tarif is intended to avoid predatory pricing by giving huge discounts to beat competitors. The new regulation include sanction scheme, from warning until operation lisence banning.

Government, He said, will hold a public hearing in five major city including Jakarta, Surabaya to gain insight and perspective from society before releasing thw norm to the public. The ministry also gave 3-6 month transition period to make everything in the new regulation in place, including driving license mandatory.

On August, 1, Supreme Court decided to revoke 14 articles of the ministerial decree that regulate tariff and additional clauses for ride-sharing app vehicles in order to provide the same treatment to taxi. According to the Supreme Court, the upper and lower tariff limits do not provide healthy competition.

“By leveraging on the technological advantages to cooperate with small entrepreneurs with the concept of a mutually beneficial sharing economy by promoting the principle of kinship as mandated by Constitution,” the verdict stated.

Besides tariff, the verdict also scrapped many clauses related to permitting and licenses, including regional quotas for ride-sharing vehicles, a requirement for all vehicles to be registered to companies instead of individuals, and restrictions on where ride-sharing vehicles can operate.

Writing by Yosi Winosa, Email: