Grab Application on Mobile Phone - Photo by Grab

JAKARTA (TheInsiderStories) – Indonesia is making it mandatory for ride-hailing applications providing four-wheeled-vehicle rides to register as transport companies within two months, as the government is taking a firm stance to recognize their legal status before the law.

Transportation Minister Budi Karya Sumadi told reporters on Monday (04/02) that the government has finalized a new regulation that will require ride hailing applications like Grab, Go-Jek, and others to get a license from his ministry, as they are in practice provide public transportation services.

“App operators will be [classified] as transport companies,” he said, adding in the next one-two days the ministry will invite stakeholders and application operators to hear their inputs over the new regulation.

Once implemented this regulation will become a major game changer for the players in the industry, as it means they must follow the rules of a public transport provider.

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.

Reported by Fauzul Muna, Email: fauzulmuna@theinsiderstories