Indonesian Supreme Court Revokes part of Ride-sharing Rule

Photo: Privacy

JAKARTA (TheInsiderStories) – Indonesia Supreme Court revoke part of ride-sharing app rule as it is contrary to the constitution, dismiss competition, and harm society. On April 2017, Transportation Ministry issued Ministerial Decree No. 26/2017 on the delivery of people with public motor vehicles not in the trajectory.

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.

Commenting on the decision, Transportation Minister Budi Karya Sumadi said on Monday at the Coordinating Minister for Maritime Affairs, that the ministry will explore the decision and come up with a new regulation within the next three months.

Budi explained, as a regulator, the minister wants all parties, both online transport and existing transportation can work together and respect each other to serve the public transportation.

“I am studying on it. However, because it is related to many people, we will also find a way out so that there is no restlessness. And I appeal to the public, the operators to be not too restless because the effectiveness of the verdict is still three months. So we have time to find a way out,” the minister said.

Budi added, that if there is a certain transportation such as online taxis feel unrivaled by other taxis, within six months they should be able to adapt, consolidate, make changes related to business capital and how to educate the driver. Not only the driver, He stressed that the society must also be given education.

For information, in connection with the issuance of PM No. 26/2017 on April 1, the ministry asked all parties to pay attention to the important points of the enactment of new regulation related to quotas, upper and lower limit rates, and vehicle ownership.

With regard to quotas, the ministry asks the Governor or the Head of the Authority to consult in advance with the Directorate General of Land Transportation to obtain a recommendation.

While related to the upper and lower limit tariffs, the ministry divides into two regions. Region I for Sumatra, Java, and Bali with the lower limit of Rp 3,500 per kilometer (km) and the upper limit of Rp 6,000 per km.

While region II for Kalimantan, Sulawesi, Nusa Tenggara, Maluku, and Papua with a lower limit tariff of Rp 3,700 per km and an upper limit of Rp 6,500 per km.

Meanwhile, in relation to vehicle ownership or Certificate of Vehicle Number (STNK) on behalf of legal entity as referred to in Article 66 paragraph (3), the ministry shall stipulate for a Legal Entity in the form of a Cooperative, in which members of Cooperative who own STNK on behalf of an individual can still use their vehicle to conduct business activities of Special Lease Transportation (ASK) up to the expiration of STNK (reverse name), by enclosing Cooperation Agreement between members of Cooperative and cooperative management. (RF/CS/EV)