Indonesia bans ride-hailing service operators including Uber, GoJek, GrabTaxi

Visual from the company website

Indonesia’s  Ministry of Transportation has banned ride-hailing services that operate online such as Uber, GoJek, GrabTaxi, stating that these companies do not meet the official definition of public transport.

While there is no clarity on the enforcement of this ban, international investors will see the move as yet another flip-flop from the President Joko “Jokowi” Widodo-led government, and it also comes at a time when Indonesia is going all-out to boost foreign direct investment.

Besides, the ban comes within days of ride-hailing services being granted permission to operate in Jakarta.

With the downturn in the commodities market hitting the country badly, leading to a sharp slowdown in economic growth, Indonesia is increasingly looking towards foreign investment to kick-start the economic cycle and also build much-needed infrastructure. Last month, Widodo had appointed 10 ministers and two ministerial-level officials, to travel around the world, and pitch to investors to come to Indonesia. The president’s move comes as Indonesia needs $384 billion over the next five years to build infrastructure across several sectors, including energy and transportation.

Director General of Land Transportation Ministry Djoko Sasono, said the ban was contained in the Notice letter No. UM.3012 /1/21/Phb/2015.

“This assertion has been made only because their operation of vehicles for public passenger transport is not in accordance with Law 22/2009 on Road Traffic and Transport and derivatives legislation is in violation of the law so that the operation is prohibited,” he said through a text message.

The notice letter was signed by the Minister of Transport Ignatius Jonan on Nov. 9, 2015. Djoko said that the letter was also addressed to the Police Traffic Corps as well as the police chief and governors throughout Indonesia.

According to him, the operations of Uber, Go-Jek, Go-Box, GoFood, GoMart, GrabTaxi, GrabBike, GrabCar, Blu Jek and LadyJek do not comply with the provisions of the law and Government Regulation No. 74 Year 2014 on road transportation.

“Whatever the name, type of operation, Go-Jek, Go-Box, GrabTaxi, GrabBike, GrabCar, BlueJek, Lady-Jek is forbidden,” he said.

But earlier this month, Indonesia had allowed Uber and Singapore-based GrabTaxi Holdings Pte. Ltd. to operate in the capital, and Jakarta’s transportation agency head Andri Yansyah had announced that Gov. Basuki Tjahaja Purnama had conveyed this message to all tech startups operating in this space. The decision to allow these companies to operate legally, came after the Indonesian Investment Coordinating Board had approved Uber’s proposal to set up a foreign investment company.

There has been a steep rise in the transportation services using Internet applications. These began in 2011  and are active in the places like Jakarta, Bandung, Yogyakarta, Surabaya, Bali and other major cities,

Total drivers for these services is estimated to have reached 20,000. The ride-hailing service not only provide transport services for people, but also package deliveries, and food orders.

The director general  said, ease of booking and cheaper rates during the initial promotion – that are barely 35 per cent of the price charged by regular public transportation – could cause friction with other transportation modes.

DEALSTRETASIA had tried to reach out to Go-Jek and GrabTaxi to get their comments on the new regulation, but these compnies had not responded at the time of publishing this article

Also Read: 

Ride-hailing apps ban: Indonesian President summons transport minister

Ride-hailing app Uber gets nod to legally operate in Jakarta

Motorcycle taxi app GO-JEK Indonesia launches on-demand delivery service

Jakarta governor says GrabTaxi can operate luxury Lamborghini taxis if it pays tax

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.