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Govt to impose harsher punishment for online taxis
After years of operating with minimum regulation, ride-hailing companies are set to face tougher restrictions as the government plans to punish companies failing to comply with the law
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fter years of operating with minimum regulation, ride-hailing companies are set to face tougher restrictions as the government plans to punish companies failing to comply with the law.
The sanctions will be included in the draft revision of the Transportation Ministry regulation
No. 26/2017 after the Supreme Court revoked 14 points in the regulation in August.
The Transportation Ministry's acting director general for land transportation, Hindro Surahmat, said those flouting the law would face financial penalties. This, he said, was to set boundaries and regulate the ride-hailing operation.
The penalty will be imposed to the legal entity serving as the ride-hailing partner.
"This way, the ride-hailing partner or companies will be responsible for their operation," he said on Monday.
He added that there would be different stages of regulation, ranging from light, mild, to heavy, with details of the violation being broken down in points.
"So there will be a regulation on how many points they violate and the sanction," Hindro said.
Each point will cost the companies Rp 100,000 (US$7.4) in fines.
For heavier violations, Hindro said the ministry would cooperate with the Communications and Information Ministry to decide the fate of the companies because ride-hailing apps were under its responsibility.
The Communications and Information Ministry will go as far as to suspend the apps if heavy violations are found.
But before the sanctions are imposed, information will be disseminated over several months to make drivers and ride-hailing companies aware of the regulations.
The sanction is part of an effort by the ministry to better regulate ride-hailing apps, to maintain safety and security as well as to provide a quality service to passengers.
Another aim is to maintain the livelihood of conventional taxi companies.
Taxi company Express Transindo Utama, or Express Group, has to retrench 400 employees as an efficiency measure after suffering losses throughout the year amid competition from online taxis.
To achieve the objective, the government has kept the draft regulation base and ceiling fare for ride-hailing trips even though it has been revoked by the Supreme Court (MA).
"The base fare is important because if it’s not in place there will be unhealthy competition between the companies. The ceiling fare is to protect the public from having to pay up to two or three times the regular taxi fare," the Transportation Ministry's transportation and multimode director, Cucu Mulyana, said.
The draft stipulates that base and ceiling fares will be set by each regional administration, while the Greater Jakarta area will be set by the Greater Jakarta Transportation Agency (BPTJ).
Another change to the regulation may include allowing vehicles to be licensed under individual names, a shift from previous requirements where it was licensed under a company’s name.
The fleet quota of ride-hailing companies will also be regulated.
The Supreme Court has previously annulled 14 points in the ministerial regulation No. 26/2017, such as the floor and ceiling prices, fleet quota and area of operation.
Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan said that the points in the revision were still being discussed, with the final draft to be proposed on Oct. 17.
The regulation is expected to provide similar level playing field between the conventional taxi drivers and the ride-hailing apps.
Three major ride-hailing apps, Grab, Uber and Go-Jek, have previously rejected the upper and lower service fare as well as the vehicle license under company name, stating that they would affect the level of service for the passengers.
In response to the planned regulation, Online Driver Employee Union (SPPO) chairman Abdullah Umar said the union supported the revision, especially on regulating the base and ceiling fare, as the current fair was considered uneconomical.
"Until now, the apps still slap a fare similar to the price of buying a fried banana," he said.
Musa Emyus, the secretary-general of the Jasa Trans Usaha Bersama (JTUB) cooperative, which partners with Uber, said that he generally appreciated the government on the revision but would remain cautious.
"It's not final yet, though, such as the case with the fare and quota. There might still be another development," he said.
