- 30 cars seized in last 3mths and more to be seized, drivers in a panic
- Govt says Uber has to set up legal entity; expert says Uber is misunderstood
JAKARTA has become the latest city to act against ride-sharing services such as those offered by US-based Uber Technologies and Singapore-based GrabTaxi, and has formed a special task force to keep an eye on them.
The task force was created on Sept 12 under the aegis of the Jakarta Transportation Agency (Dishub DKI Jakarta). Its primary target appears to be Uber however, and not GrabTaxi – a taxi-hailing startup that also offers premium ride-sharing services under the brandname ‘GrabCar.’
“We need to keep an eye and send out a warning to Uber that its operation in Jakarta is illegal,” agency head Andri Yansyah told Digital News Asia (DNA) at his office in Jakarta on Sept 15.
Jakarta authorities have rejected Uber’s operations in the city, and said the American company needs to establish a legal corporate entity and follow local transport service regulations.
Until it does so, the task force is ready to seize more vehicles, according to Andri. It has already seized 30 vehicles in the past three months.
At his office on Sept 15, Andri first told DNA that all 30 cars seized belonged to Uber. On Sept 16 however, he said that the 30 cars were from both Uber and GrabCar, but did not specify the number of cars from each service.
It is however believed that most of the seized cars came from Uber’s network.
Andri said that the problem with these two services is that they are using private-owned cars which are not registered, and that they do not have all the permits necessary to provide transport services to the public.
“We seized 10 cars first as a warning, then another 20. As long as [they do] not set up a legal entity here, we are going to continue with this action.
“The reason behind it is simple: It does not have a presence here [in Jakarta]. It doesn’t have a real office, and it doesn’t pay taxes,” he said, when referring specifically to Uber.
“What if something happened to consumers using its service? Whose responsibility would it be?” he added.
Andri said Uber and GrabCar needed to comply with seven requirements under Indonesia’s traffic and land transportation regulations. They must have:
A legal entity [registered in Indonesia]
2) A business domicile letter
3) Order clearance
4) A minimum of five cars
5) A carpool for service and maintenance
6) Passed vehicle inspection tests
7) An operating licence
As at press time, neither Uber nor GrabCar had responded to DNA’s requests for comments or information.
However, Uber has officially denied any of its drivers had been arrested in conjunction with the seizures after some conflicting media reports.
“You have been given incorrect information by the Jakarta Police,” Uber spokesman Karun Arya told Reuters.
Also, in August, GrabTaxi Indonesia’s head of marketing Kiki Rizki told The Jakarta Post that her company had fulfilled the seven requirements before it began operating its GrabCar service in Jakarta, and had conveyed this to Andri.
“[We] confirm that we have fulfilled the seven requirements. During a recent discussion, [Andri] asked us to show him evidence of documents to prove that we meet all the requirements,” Kiki told The Jakarta Post then.
She said the company would ask to speak to Andri again to prove that its services were legal. GrabTaxi would continue to operate its GrabCar services, she added.
Meanwhile, what the city administration wants seems simple enough: Be here legally, get your operational permits, pay taxes, and we’re cool.
But is it as easy as it seems?
Most consumers think of Uber as some kind of upmarket taxi company offering great services through its app. They see it as purely an app and a middleman connecting customers who need transportation, with drivers who can provide such services.
This is actually the issue in Jakarta, according to Danang Parikesit (pic), chairman of the Transportation Society of Indonesia (Masyarakat Transportasi Indonesia).
“I think there is a huge misconception about Uber. Uber is a platform, and therefore the Government needs to look at it through [the lens of] a different transport service category.
“[Uber] is different from taxis,” he told DNA via email.
Rather than insist Uber set up a legal entity in the country, the Government needs to look at regulations that can best ensure the safety of consumers.
“A legal entity is actually irrelevant in the case of the service provided by Uber to its customers,” said Danang.
“Take Agoda and Amazon – they have unique services to cater Indonesian customers, but neither of them has a legal entity [in the country],” he added.
If it is taxes or revenue-generation that the Government is concerned about, then it should consider some way of imposing taxes on the drivers instead, Danang suggested.
“We need to differentiate between an ‘illegal’ and ‘unregulated’ market. Uber is operating in an unregulated market,” he added.
Danang referred to Manila’s example. In the Philippines earlier this year, the Department of Transportation and Communications (DOTC) amended its regulations to introduce a new classification that would recognise ride-sharing services.
GrabTaxi said its GrabCar service was the first to be legalised as a ‘Transportation Network Company’ (TNC) in the Philippines under the amendment.
“This service [Uber] needs special regulations because it operates in a different scheme than the conventional transportation company,” Danang said.
There are reasons why Uber seems to be bearing the brunt of Jakarta authorities’ attention, and not GrabTaxi, a company founded in Malaysia by Malaysians but which has since moved its headquarters to Singapore.
According to Danang, it is because GrabTaxi has a “better government relations strategy” compared with Uber, and has legally incorporated PT GrabTaxi Indonesia in the country.
“This simply means it has a legal entity, it pays taxes – plus, it uses regular taxis [for its core GrabTaxi service].
“Even though GrabTaxi is also a portal and offers the same services as Uber, it enjoys greater acceptance because it uses regular taxis,” he said.
Although GrabTaxi uses privately-owned cars for its GrabCar service, it is having a smoother time of it compared with Uber, Danang said, citing its government relations strategy.
Uber, for its part, keeps repeating the same message to the media, saying that it is not a taxi company, and that Uber drivers are ‘partners’ from various car rental companies and not its employees.
“We do not own or operate vehicles or employ drivers. Our mobile application simply connects a rider’s request to a partner from a licensed for-hire chauffeur-driven transportation company,” Uber said in a statement to The Jakarta Post earlier this year.
Uber drivers panic, but continue plying trade
An Uber driver operating in Jakarta told DNA that the news of 30 Uber cars being seized “freaked” him out.
“I joined Uber just last week because I was let go in my previous job as a worker in a furniture manufacturing company – I don’t want to lose this new job as well,” said the driver, who requested anonymity.
He said he decided to join Uber after some prompting from a friend who was earning around IDR5-7 million (US$348-487) per week working with Uber.
This is a huge raise compared with his previous salary of only IDR2.7 million (US$191) per month, and makes a big difference when it comes to supporting his family.
“Even though hearing the news [about the seizure of cars] gave me the chills, I am committed to giving good service to customers,” he told DNA.
“If customers are happy with our service, then they will tell the Government to keep Uber in Jakarta. All I can hope for is that the Government will listen to the customers’ voice,” he added.
Users roped in
Uber has 6,000 drivers it calls partners, and tens of thousands of customers it is hoping to recruit as its advocates in this issue.
On Sept 12, just after the special task force in Jakarta was created, each customer received an email titled ‘[Customer Name], Make Your Voice Count!’ urging them to speak up.
The company also created a ‘Support Uber Indonesia!’ website (pic above) calling for 25,000 online signatures to support its operations in Jakarta. It’s been only four days, and already more than 24.000 customers have pledged their support.
While 25,000 online signatures are not going to give Uber a free ride in Jakarta, it will arm the company with the best ammunition to defend its allegedly illegal presence in the city: The voice of its customers.
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