Succumbing to severe public backlash, Indonesia’s Ministry of Transportation has backtracked on its proposed ban of ride-hailing transport apps like Uber and Go-Jek.
Ignasius Jonan, Indonesia’s transport minister, was forced forced to do an U-turn on ride hailing apps, and conceded that pubic transport infrastructure in the country’s growing cities were inadequate, after he was rebuked by the country’s president Joko Widodo.
“Innovations in both two and four-wheel transportation exist because they are needed by the people,” President Widodo wrote on Facebook on Friday. “Don’t let rules that haven’t kept up with the development of technology make people suffer,” he had added.
Following the president’s postings on social media, transport minister Jonan said: “Since this (ride sharing apps) has become a public need and in order to fill the gap, given that the public transportation is not adequate to serve all public needs, (ride hailing apps can) please go ahead. However, it is better to coordinate with the Police.”
DEALSTREETASIA had reported Friday that Indonesia had asked the local police to take action against the operators of app-based transport services, as well as prohibit drivers from using the service as they did not fall under the country’s lawful definition of “public transport”.
The Transportation Ministry had barred the ride-sharing bikes and taxis on the ground that they did not meet the legal, established norms for public transportation.
The minister had earlier said, the public transport rules stipulate that such vehicles should at least be a three-wheeler (Indonesia has a huge motorcycle taxi base) and the operators should be a legal entity with a transport permit.
According to Director General of Land Transportation Ministry, Djoko Sasono, the prohibition of the operation was contained in the Notice No. UM.3012 / 1/21 / Phb / 2015 signed by the Minister of Transport Ignatius Jonan, dated November 9 2015.
“The President has just responded to our aspirations by cancelling the Transportation Ministry’s decision on banning ride sharing apps for bikes and cars. Thank you all for your support,” said Co-founder of Go-Jek Nadiem Makarim
Grab Taxi spokesman said, in a statement: “We respect and will comply with local regulations. The ride-sharing industry is still in its infancy and we will continue to work with the government and all industry stakeholders to expand the regulatory framework. We believe that it’s our shared objective to make the Indonesian public transportation more efficient, and to enable all Indonesians to commute safely.”
Commenting on Transportation ministry regulation, Tulus Abadi, the chairman of the Indonesian Consumer Foundation (YLKI), said that the basic reason behind the prohibition was correct because motorcycles did not meet the technical specifications for transporting people and they lacked safety standards.
He, however, said the ban is much too late because Go Jek and other similar apps have grown big mainly due to the government’s failure to provide reliable and affordable public transportation.
The YLKI, therefore, urged the government to improve the transport infrastructure.
Anthony Leong from the Indonesia Young Entrepreneurs Association (HIPMI), also questioned the timing of the ban.
The ministry regulation, he said, was already not in favor of the digital industry. “It’s killing the development of startups in Indonesia.The government should be more open to perceive this,” said Leong.
Go-Jek currently has around 20,000 drivers spread across Jakarta, Bandung and Bali, for many of whom driving is the only source of income.