Ride-hailing firms protest new rules in Indonesia even as Singapore allows taxis to introduce surge pricing

Subscribe to our newsletter

Uber. Photo: Reuters
Uber. Photo: Reuters

In the latest chapter of Indonesia’s online transport industry, the new set of rules that has been introduced by authorities to regulate the sector, has led to protests from the region’s largest ride-hailing companies – Uber, Grab, and Go-Jek – all of who have argued that it will “interfere with the market and curb transport innovation”.

The rules, locally known as PM 32 and which will be effective on April 1, will impose fleet quota, setting the price floor and ceiling, and changing ownership of vehicles, among others.

As reported by this portal earlier, last year, the Indonesian government had given ride-hailing app companies six months, or until April 1, 2017, to comply with the new Transportation Ministry regulations, that required that only cars with engine specifications of 1,300 cc or higher can be used by the drivers of of these apps. The rules had also required drivers to be recruited as employees instead of partners.

Ridzki Kramadibrata, Grab Indonesia managing director said, that the rules are “protectionist and not pro-consumer.”

“The regulation as it stands will set the entire transport industry back to the entrenched practices of incumbent transport operators,” Kramadibrata said, when addressing the media last week.

“We believe three points in particular will set the transport industry back. First, the government’s proposed intervention on pricing…Second, setting vehicle quotas encourages monopolistic positions…Third, the proposed change that requires our drivers to transfer their vehicle registration certificate (local abbreviation: STNK) to a business cooperative takes away our drivers’ potential to own their cars eventually, and may impact how they use their vehicles to earn incomes,” he added.

As for other points spelled out by the new rules, such as road safety standards (KIR) and general security, all three leading ride-hailing firms said they were in agreement with these regulations.

In a joint statement, Uber, Grab and Go-Jek have asked the ministry to revisit the rules and wait for another nine months before ratifying it.

These developments come even as Singapore allowed dynamic fares for taxis, and the move has seen Grab being the first off the block, as it announced that it had signed an agreement with SMRT Taxis to enable the latter’s drivers to use its  ride-hailing app for taxi bookings, and also offer customers dynamic fixed fares for their taxi trips booked via the Grab app.

The dynamic fixed fares scheme, which will be launched by Grab soon, lets customers know the fare for their intended trip before the start of the journey.

Dynamic fixed fares are displayed upfront, and already accounts for travel time, distance, booking fees, and real-time demand and supply for taxis. SMRT taxi drivers who accept booking via this new service can enjoy fixed, competitive fares for their service.

Authorities in Singapore have reviewed the proposals, and have given the two companies the green light to implement surge pricing.

Commenting on the partnership, managing director of SMRT Taxis Tony Heng said: “The market has evolved and matured significantly, and more customers are now open to have dynamic fixed fares for their taxi rides. This partnership with Grab allows us to keep the pricing for our services competitive, catering to different customer needs and preferences. In addition to our SMRT Taxi booking app and hotline, Grab’s platform will expand our taxi hirers’ access to meeting customer demands.”

As part of the collaboration, SMRT taxi drivers who are new to Grab will be incentivised to use Grab’s booking platform to complement their street-hail pickups. They will also undergo training to help familiarise them with the app, and learn about Grab’s safety guidelines and expected code of conduct.

Metered fares continue to apply for street-hail pickups as well as phone and GrabTaxi bookings.

Grab now claims to have over 100,000 drivers spanning across all its services including GrabTaxi, GrabCar, and GrabHitch.

Also Read:

Grab Indonesia to develop mobile payments, partner with fintech companies: Ridzki Kramadibrata

Grab follows rival Go-Jek with R&D centre in India, adds in Vietnam too

China’s Tencent in talks to invest in Indonesian unicorn Go-Jek

Grab commits $700m to SEA’s largest economy to battle Go-Jek

Tags: