#Asia Indonesia rejects ride-hailing startups’ plea for grace period, will proceed with new regulation in April

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However, Minister of Transportation Budi Karya Sumadi acknowledged that ride-hailing startups will need an “adjustment period”

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Last week, major ride-hailing startups in Indonesia –Go-Jek, Grab, and Uber– released a joint statement declaring their objection towards the revision of Ministry of Transportation Regulation No. 32/2016.

The revision includes 11 points that regulate the definition and operational of ride-hailing startups, and the companies rejected at least three points on driver-partners quota, maximum and minimm tariff, and vehicle ownership.

They also called for the government to give nine-month grace period to ensure smooth transition process.

But on Tuesday, The Jakarta Post reported that Minister of Transportation Budi Karya Sumadi has rejected the companies’ request to delay the implementation of the new regulation, which is set to begin on April 1.

However, speaking in a video conference with regional leaders and representatives to socialise the issue, Sumadi acknowledged that an adjustment period will be necessary to implement the new regulation.

Also Read: Grab vs. Uber: Which is the better ride-hailing app in Singapore?

“We told regional administrations and police that they should not enforce the law right away [regarding the matters]. We will disseminate the information first,” he said.

The road is on fire

 

The revision of the regulation includes the following 11 points: vehicle type, engine displacement, minimum and maximum tariff, fleet quota for each company, vehicle ownership status, periodical feasibility tests, service stations, home base for vehicles, taxation, access to dashboard, and sanctions.

As in many Asian countries, recently conventional public transportation industry players have been stepping up their rejection towards ride-hailing startups.

In the past month, there has been riots between mini-bus drivers and online ‘ojek‘ (motorbike taxi) drivers in various Indonesian cities, such as Bandung and Tangerang. Even the local government of Jogjakarta is considering to completely ban ride-hailing startups from operating, in a move to protect conventional taxi companies.

Today, local news reported another clash between mini-bus drivers and online ojek drivers in the city of Bogor. One mini-bus was destroyed as a result of the clash, though there were no clear information yet on the number of casualties, if any.

Image Credit: bowie15 / 123RF Stock Photo

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