Millions of Indonesian ride–hailing drivers would receive major increases to financial and social benefits under a draft decree being considered by President Prabowo Subianto, two sources said, threatening the profitability of ride-sharing platforms in their largest market in Southeast Asia.
Prabowo is under pressure to respond to drivers’ demands for better pay and conditions, particularly after their involvement in widespread student-led protests in August demonstrated the political clout of the sector’s workforce.
Concerns about driver welfare have been stoked, meanwhile, by a potential merger between the two largest ride–hailing platforms in the country, Indonesia’s GoTo and Singapore-based rival Grab. Critics of the deal say it will create a monopoly that will work against drivers.
The draft rules, seen by Reuters, detail the concessions and potential immediate enforcement via a presidential decree, which have not previously been reported. It was not clear if this was the final draft or when it would be enforced.
The decree under consideration would reduce caps on commission that ride–hailing companies take from drivers for each trip to 10% from 20%.
Indonesia is the only country in Southeast Asia that places caps on commission for two-wheel ride–hailing services, and a cap would further limit the platforms’ margins.
Platforms would also have to pay for drivers’ accident and death insurance in full, which could cost companies about $1 a month for each of the roughly seven million delivery drivers in the ride–hailing industry.
It would also split health, old-age and pension premiums for industry workers, potentially driving up hiring costs further.
“Most of the players in the industry cannot sustain these changes,” an industry source, who has seen the draft, told Reuters, expressing concern that the insurance fees would send annual spending sharply higher.
A second source, who also confirmed the proposals, warned that the costs of premiums could lower margins and reduce the number of drivers companies allow on their platforms.
Such benefits have for years been resisted by companies that insist drivers are gig workers who not eligible for the same insurance available to full-time employees.
The draft also authorises the government to review agreements between the companies and online transportation workers, and protects the right to unionise.
The Indonesian government and the presidential office did not respond to requests for comment.
The Indonesian Transport Workers Union, which represents about 2,000 ride–hailing drivers and couriers, welcomed the draft rules but asked for government assurance that the policy, including the insurance benefits, would be imposed without additional requirements or caveats.
“It must be ensured that the percentage received by workers is based on the total amount paid by consumers to the platform,” said union head Lily Pujiati.
GoTo, Grab and rivals Maxim and inDrive did not respond immediately to requests for comment.
Political force
The administration of President Prabowo has been particularly sensitive to appeasing drivers. Presidential spokesperson Prasetyo Hadi has labeled them “heroes of the economy”.
“Motorcycle taxi drivers have become an increasingly visible political force, staging multiple protests over commission rates and rights and drawing significant public attention to their grievances,” said Siwage Dharma Negara, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.
He said the death of a motorcycle taxi rider during the August protests sharply intensified public scrutiny of gig workers’ vulnerability and was likely to have helped to increase political urgency around the issue of worker protection.
In 2024, Indonesia led the ASEAN taxi market with a 37% share, helped by rapid uptake of digital payments, data from India-based research firm Mordor Intelligence showed.
The decree under consideration would also apply to on-demand logistics businesses such as Hong Kong-based Lalamove and global logistics service provider J&T Express, which is listed on the Hong Kong stock exchange.
Reuters
