Revisions to ride-hailing rules in Indonesia to go ahead as planned
By Yunnie Marzuki March 22, 2017
- A period of adjustment will be allowed post-implementation
- All parties will discuss the main issues pertaining to fares, KIR, STNK and vehicle quota
THE Indonesian Minister of Transportation Budi Karya Sumadi, Minister of Communications and Information Rudiantara, and national police chief of Tito Karnavian held a closed-door video conference with the governors of West and East Java as well as the mayor of Surabaya on March 21 in response to concerns about revisions to the rules governing ride-hailing apps.
On March 20, Grab, Go-Jek and Uber had issued a joint statement on the Indonesian government’s revision of the rules governing online transportation, asking Sumadi to give them nine months to review the revisions, which are to be implemented on April 1.
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 Grab managing director Ridzki 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.
According to a statement by Sumadi after the conference call, the revision of Ministerial Regulation No. 36/2016 will be implemented on April 1.
“Transportation is a medium for the community. Revisions to the regulations are part of the government’s efforts to find a balance between conventional and online transportation. Therefore, these regulations are required to save the existence of online transportation and protect conventional transportation from being dominated by online transportation,” says Sumadi.
However, post-implementation and having taken into account the request for more time by online transportation companies, the government will local governments as well as conventional and online transportation companies time to adjust. No timeline was specified by the minister at this time.
Karnavian says that the provincial governments, related stakeholders and the police department will communicate with representatives of both conventional and online transportation providers to iron matters out.
“Local governments together with conventional and online transportation providers will discuss the main issues pertaining to fares, KIR, STNK, and vehicle quota. After these discussions are over, the central government will assist in making the final decision,” adds Karnavian.
Sumadi says that the process of deciding the vehicle quota and fares will be mathematical.
“As an example, if the fare for 1km is 1,000 Rupiah (US$0.80) then this will become the base for local governments to enforce the regulations.”
According to Karnavian, the central government will be the final decision maker as there differences in transportation patterns and the characteristics of each province.
“The government is here to address the dynamic issue between conventional and online transportation. This revision states that online based transportation is legally allowed, but the system has to be set in order to ensure safety and comfort. The process must be smooth to prevent friction between conventional and online transportation as well as maximise the usage of digital technology within the community,” says Rudiantara.
Reports on local news sites Kumparan and The Jakarta Post indicate a conflict between conventional and online transportation drivers with the latter protesting against the existence of ride-hailing apps.
The government is now seeking feedback from provincial governments on the situation after the regulations are implemented on April 1.
“There are a few clashing dynamics between conventional and online transportation in several places and we hope these regulations will resolve the situation,” says Karnavian who also hopes that all parties will now stop disrupting the community.
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