- They have four main concerns regarding the new rules
- Believes rules are protectionist in nature and not consumer-friendly
THREE ride-hailing apps Grab, Go-Jek, and Uber issued a joint statement on the Indonesian government’s revision of the rules governing online transportation, asking Minister of Transportation Budi Karya Sumadi to give them nine months to review the revisions.
The revisions were meant to be implemented on April 1.
“New changes were proposed in PM32/ 2016 this week, which we believe are protectionist and not pro-consumer. The regulation as it stands will set the entire transport industry back to the entrenched practices of incumbent transport operators, who can invest more effort to innovate and improve their services for Indonesian commuters,” says Grab managing director Ridzki Kramadibrata (pic above) in a press release.
The government had already planned on making revisions via Ministerial Regulation No. 36/2016 (refer to Chapter IV Article 40 to 42) on setting the base and ceiling fares of online transportation. The specifications of cars which can be used would change to 1,000 cc and above from 1,300cc previously.
The revision would also limit the number of vehicles in operation, label ride-hailing app vehicles with special stickers, change the vehicle registration certificate’s (STNK) name to that of a legal entity (Limited Liability or cooperative), not an individual and oblige every ride-hailing car driver to carry out regular roadworthiness inspections to obtain a certificate (KIR).
In the joint statement signed by Kramadibrata, Go-Jek president Andre Soelistyo, as well as APAC and Uber regional general manager Mike Brown, they agree to cooperate with the government’s rules and hope that the government will consider making changes based on their concerns.
“We urge the government to extend the timeframe to implement the rules in order to fully consider its impact on consumers and drivers,” Kramadibrata adds.
Grab, Go-Jek, and Uber have four main concerns regarding the new rules – the need to apply for KIR, fare capping, the limitation number of vehicles in operation and changes to the STNK.
The three parties support a plan to use an embossed emblem to indicate that a vehicle has received its KIR by actively and transparently providing information to driver partners.
They hope that the government will conduct inspections in a timely fashion and provide special queues for driver partners, as well as allowing vehicle testing to be conducted by vehicle distributors and other private entities like garages.
On base and ceiling price setting, the three parties believe that technology makes it possible to provide accurate fare calculations based on supply and demand so that the cost paid by consumers reflects the value of the goods and services provided.
The plan to allow regional governors to set fares is not in keeping with the desire to have fares that are appropriate to existing conditions.
“The government’s proposed intervention on pricing will mean passengers end up paying more for a ride than they need to. We believe that a fully flexible pricing approach that responds to the needs of the market is the most efficient approach to price-setting,” comments Kramadibrata.
Regarding the government’s plan to limit the number of vehicles, they feel that it is not in keeping with the spirit of a people’s economy that is seeking to harness technology. This limitation will make it harder for citizens to have reliable mobility options and the chance to be micro-entrepreneurs in the transportation sector.
“It will restrict the number of people who can benefit from our services. Setting quotas favour the incumbents,” explains Kramadibrata.
“What this means is, competition is stifled. Progress is slowed. Improvements don’t come in. And unwanted side effects like hoarding of licences, stagnation of service levels, profiteering from monopolistic positions will set in. Worse, the livelihood of the hundreds of thousands of drivers on our platform are suddenly at risk. Think about the families, and the children, who may be affected,” says Kramadibrata.
They also reject the requirement that a vehicle’s title must be held by a legal entity (Limited Liability or cooperative). This means drivers must transfer ownership of their vehicles to the cooperative in order to provide transport services to riders.
“This is my biggest worry and it is heartbreaking for the people who drive with Grab. These folks work long, honest hours to support their families, to save up for their dreams, to seek to improve their quality of life. For themselves and their loved ones, to take away their potential to own their cars eventually and to give that right away to a business cooperative, will be unfair to them,” said Kramadibrata.
However, Grab, Go-jek and Uber hope and trust that their suggestions will be received positively by the government.
“Grab is committed to working in consultation with the government, and will strive to represent the interests of consumers and our drivers,” Kramadibrata concludes.
There was been no official response from the government on this matter at press time.
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