Indonesia raises tariff rates for ride-hailing firms

The Indonesian government has finally enforced a regulation on the use of app-based motorcycle taxis, increasing the tariff rates for two ride-hailing companies operating in the country – Grab and GOJEK.

The long-awaited regulation was implemented starting May 1, 2019 in five cities in Jakarta (Jabodetabek), Bandung (West Java), Yogyakarta, Surabaya (East Java) and Makassar (South Sulawesi).

A legal framework in this direction, which was earlier announced in March this year, will factor in provisions such as standard minimum fare of motorcycle taxis and customer protection or safety. The regulation also stipulates that the minimum tariff should take into account a motorcycle taxi’s operational cost.

Motorcycle taxi drivers have long been demanding higher fares, proposing them at a minimum Rp 3,000 (21 cents) per kilometer, in their effort to ensure a better and decent living condition for themselves.

Till the regulation came into effect, Grab and GOJEK had never set their fares, or ‘floor price’, for the fear that it could lead to a drop in rides, thereby hurting their business.

The Transportation Ministry in Indonesia, on its part, is reviewing and monitoring the impact of the ‘new tariff’ regulation that they will announce next week.

Grab Indonesia president Ridzki Kramadibrata said, he is yet to review or evaluate if there has been a decrease in the number of their passengers.

“We also will officially announce and socialize [about the new tariff] after the government’s evaluation next week,” Ridzki told DealstreetAsia, adding that the government would monitor the new tariff impact, especially on passengers and drivers.

Besides tariff adjustment, the regulation also requires ride-hailing firms to provide safety features to their passengers.

Grab and GOJEK previously introduced features such as ‘panic button’ and ‘share my ride’ for both their passengers and driver-partners. The regulation also specifies that drivers need to obtain valid driving licenses, wear official uniforms and have knowledge on street routes, and comply with traffic rules.

Also read:

Indonesia to soon introduce regulations for motorbike-hailing services

Indonesia plans to regulate ride-hailing rates in setback for Grab, Go-Jek

GrabTaxi invests $6m in safety features, to be rolled out regionally