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Because they are defined as tech companies, there will be restrictions to what ride-hailing apps can and cannot do in the transportation sector

Just when we thought the controversy related to car-hailing app in Indonesia had cleared up, this week Minister of Transportation Ignasius Jonan announced a new set of regulation that will restrict business activity for car-hailing app companies such as Uber, Grab, and now Go-Jek.

Under the Ministrial Regulation No. 32 Year 2016, as tech companies, car-hailing app companies will not be able to act as public transportation companies.

According to CNN Indonesia report, this means car-hailing app companies will not be allowed to:

1. Set their own tariff
2. Recruit drivers
3. Set up drivers’ income

Companies such as Uber, Grab, and Go-Jek will now be obliged to work with transportation companies to recruit drivers, use their vehicles, and set tariffs.

They are also obliged to report company identity and give the Ministry of Transportation full access to the operational data of drivers and vehicles.

The regulation has been enacted since April 1 and will be effective from October 1.

Also Read: Indonesia’s Startup Legal Clinic, a helping hand for startups’ legal woes

According to a report by Jakarta Globe, the new regulation does not mention motorcycle taxis services such as Go-Jek and GrabBike, which means the ministry still considers them as illegal forms of public transport.

Grab responded to the issue by stating that it will focus on studying the new regulation first. It also stated that the company would continue referring to the old regulation, and is going to make sure that all members in their drivers and car owners co-op follow the government’s instruction.

“We will continue to actively communicate with all stakeholders, including the government, to understand the new regulation and to reach the common goal of providing safe and convenient transportation options for the people of Jakarta,” said Grab Indonesia Managing Director Ridzki Kramadibrata in an official statement.

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Image Credit: Javier Calvo on Unsplash

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