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Ride-hailing firms oppose idea to class them as transportation companies
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A Jakarta resident uses his smartphone to access a ride-hailing application. (JP/Jerry Adiguna)
T
he fate of Indonesia’s ojol (online ride-hailing) firms is on the line, as lawmakers seek to classify these companies as commercial transportation entities rather than their current status simply as IT firms, which many expect will have significant consequences on the future of their business model.
The discussion emerged during a meeting between lawmakers on House of Representatives Commission V, which oversees transportation and infrastructure, and executives from Singapore-based Grab Indonesia; Gojek, the ride-hailing arm of homegrown tech giant PT GoTo Gojek Tokopedia (GoTo); and Russia-based Maxim.
“We know you are not classified as transportation firms. The question is, will you agree if one day you are considered as such?” Ridwan Bae, deputy chief of House Commission V asked the three tech firms.
The plan to regulate ride-hailing firms began years ago, but to no avail as it contravened Law No. 22/2009 on traffic and public transportation, which rules out two-wheelers as a public transportation mode due to safety reasons.
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In 2019, the government tried to fill the gap by introducing a Transportation Ministry regulation to provide a code of conduct to be followed by drivers and application providers. It included standards on safety and uniforms, as well as maximum and minimum fares.
The ministry was well aware that the regulation was purely discretionary and urged parties not to challenge it in the court for having no legal basis. Since then, efforts to provide a legal basis for the industry have remained in abeyance.
