11 October 2019 (closed)
USD/IDR (14,140) +14.00 +0.10%
EUR/IDR (15,591) +14.03 +0.09%
Jakarta Composite Index (6,105.80) +82.16 +1.36%
Indonesian drivers of taxis, buses and bajaj (three-wheeled scooters) gathered on Monday (14/03) on several locations - in front of the State Palace, City Hall, and the Ministry of Communication and Information - in Central Jakarta to demonstrate against the presence of online transportation applications such as Uber Taxi, GrabCar and Go-Jek. Protestors claim that these mobile apps are operating illegally in the country (as these services are not regulated by law) and cause a decline in income for long-time established transportation services, including taxi services, bus services and the more traditional transportation services such as bajaj and ojek (motor taxi).
An estimated 2,000 drivers gathered on Monday, mostly from taxi services operators Blue Bird Group and Express Transindo Utama, demanding a ban on mobile apps that facilitate transportation services as these have caused a decline in clientele and income for the long-term established transportation companies active in the larger cities of Indonesia. Over the past two years mobile apps such as Uber, GrabCar and Go-Jek have entered the Indonesian market (despite these apps not being regulated by existing Indonesian laws regarding e-businesses or transportation) and have managed to become increasingly popular. These mobile apps are popular because it is much easier to order a (motor) taxi through your mobile phone than to go to the street or bus-stop and wait for transportation services. Moreover, mobile apps such as Go-Jek and Uber are considerably cheaper than long-term established transportation services in Indonesia. Due to a vacuum in Indonesian law there has been ongoing debate since mid-2015 whether the services provided by these mobile apps are illegal within the territory of Indonesia (authorities are currently drafting new regulations - including a roadmap - for Indonesia's e-commerce businesses).
Local media in Indonesia reported that the country's Transportation Ministry submitted a formal letter, signed by Transportation Minister Ignasius Jonan, to the Communication and Information Ministry on Monday (14/03) requesting the latter to block online applications owned by Uber Asia Limited (operator of the Uber Taxi app), and Solusi Transportasi Indonesia (operator of GrabCar) because the status of the four-wheeled vehicles used for these transportation services is unclear. The formal letter also requests the banning of other online mobile apps that have not engaged in a partnership with an official transportation services company in Indonesia. As such, the problem is not the existence of these mobile apps but the status of the vehicles used for transportation services made possible through these apps. Minister Jonan said companies like Uber Taxi and GrabCar should obtain formal permits to conduct transportation services in the country. Moreover, operators behind these mobile apps do not have a legal presence in Indonesia and therefore do not pay any taxes (San Francisco-based Uber opened an office in Jakarta in late 2015 but has not applied for permits to conduct transportation services).
Earlier, online rides services active in Indonesia argued that they respect existing Indonesian regulations but are not affected by transportation laws as these apps are online technology that facilitates transportation services; they are not transportation operators.
Indonesia's Communication and Information Minister Rudiantara said his ministry cannot simply block these mobile apps (unless they contain pornographic content or encourage gambling). The ministry will study the proposal from the Transportation Ministry as well as the regulations governing these apps. Results of this study will be reported to Indonesian President Joko Widodo.
As such, Indonesian authorities - including President Joko Widodo - are facing a dilemma: keep the people away from these much-loved mobile apps or allow long-term established transportation services, which include tens of thousands of drivers who are living just above the poverty line, to miss out on income. A spokesman for Widodo said authorities need to find a middle way that can be a solution for all involved parties.
Jakarta Governor Basuki Tjahaja Purnama said he believes online ride-sharing apps active in Jakarta should secure permits from Indonesia's Transportation Ministry. He would not suggest a ban on app-based transportation services because Indonesia needs to develop and adjust in accordance to the new age of Internet-based services. However, these mobile app operators need to follow Indonesia's transportation regulations, according to the Jakarta Governor. These apps are particularly popular in Jakarta, Indonesia's capital city, where public transportation is in a poor state.