Indonesia’s listed car rental and logistics company Adi Sarana Armada (ASSA) has received partnership offers from ride-hailing apps operator Go-Jek, Uber and Grab, which have been facing a tough regulatory environment in southeast Asia’s largest market.
The company is undecided such an alliance would require it to comply with government regulation pertaining to ride-hailing apps.
The government requires all ride-hailing apps to work in partnership with a rental car cooperative or company. So far, Grab Car and Uber have helped set up cooperatives for their drivers, while motorcycle taxi firm Gojek set up a company called PT Panorama Mitra Sarana to work with its own car-hailing app Go-Car.
Prodjo Sunarjanto, Adi Sarana’s president director told reporters, a partnership with Gojek, Uber or Grab will require the company to add more cars to its fleet as also drivers.
Earlier this year, both Uber and Grab launched an on-demand ride-hailing services for business clients triggering further competition to Adi Sarana and its peers.
Director Hindra Tanujaya said, the company had allocated a capital expenditure of Rp1 trillion ($73.53 million) of which Rp170 billion would be used for the purchase of 1,000 vehicles this year.
With this, Hindra said, Adi Sarana’s fleet would touch 18,500 with fleet utilization of 95 per cent.
More than 60 per cent of Adi Sarana’s Rp1.32 trillion revenue last year came from its rental car division. The company is targeting a 10 per cent increase in revenue this year, Prodjo said.
The government requires all ride-hailing apps to work in partnership with a rental car cooperative or company. So far, Grab Car and Uber had helped set up cooperatives for its drivers, while motorcycle taxi firm Gojek had set up a company called PT Panorama Mitra Sarana to work with its own car-hailing app Go-Car.
The Ministry of Transport released regulation number 32/2016 on non-route people transport services — enacted on April 1 but only coming into effect on Oct. 1 — which will force technology firms to work with external transportation companies that have been licensed by the ministry.
Any transportation company can request such license by submitting evidence that it owns at least five vehicles under the company’s name; has a designated place to pool and tend to the vehicles and employs drivers who have special driving licenses for public transportation.
Grab Indonesia managing director Ridzki Kramadibrata hopes to have all its partner’s cars pass the certification process by May next year.
As demanded by the government, Grab has partnered with a licensed third-party transportation provider cooperative called Koperasi Jasa Persatuan Pengusaha Rental Indonesia (PPRI). PPRI has started to submit GrabCar partners’ vehicles for testing to obtain roadworthy certification on May 16.
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