Indonesia rolls out new ride-hailing regulations in 88 new cities

A GrabBike motorcycle driver, left, and a Go-Jek motorcycle driver wait for orders in Jakarta, Indonesia, on Sunday, Aug. 13, 2017. Photographer: Dimas Ardian/Bloomberg

Indonesia’s Transportation Ministry will roll out the increased tariff rates for app-based motorcycle taxis in 88 cities starting Friday (August 9), a ministry official announced on Thursday.

The ministry discussed the implementation with the two largest ride-hailing firms in the country, GOJEK and Grab, in a meeting on Tuesday.

The adjusted tariff is based on the Transportation Ministerial Decree No. 348/2019 on the guidance for motorcycle taxi fares.

The ministry began implementing the tariff hike on May 1, with the second phase starting on July 1.

Ahmad Yani, Land Transportation Director-General, Ministry of Transportation, told reporters on Thursday that the nation-wide implementation of the new tariffs stands at 80 per cent and by September, will cover all 133 cities.

“We will evaluate this new tariff in the next three months and we will also monitor how GOJEK and Grab comply with this implementation,” Ahmad said.

The regulation factors in provisions such as standard minimum fare for motorcycle taxis as well as customer protection and safety. It also stipulates that the minimum tariff should take into account a motorcycle taxi’s operational cost.

For the last few years, the two ride-hailing unicorns have been operating in the region’s largest economy with minimum guidelines, especially related to tariffs, from the government.

The new motorcyle taxi tariffs set by the government are 11-20 per cent higher than previous rates. The government set the minimum tariff at Rp 1,850, while the maximum tariff is capped between Rp 2,300 and Rp 2,600.

In a statement, Grab said the company is ready to carry out the implementation.

“We will adjust our technology system, such as our algorithms and GPS, in accordance with the tariff scheme [in dozens of new cities]. We will also conduct socialization for our driver-partners,” said Grab Indonesia’s public affairs chief Tri Sukma Anreianno.

Grab said a survey it conducted in May found that the tariff hike has increased the income of its driver-partners by 20-30 per cent.

GOJEK echoed Grab’s response and said that the company has the same mission as the government to ensure sustainable incomes for its driver-partners while promoting healthy competition in the market.