Supreme Court Overrules Car-Hailing Service Regulation

The Supreme Court has annulled a government regulation on online car-hailing services after a finding that it contradicted higher laws and regulations. (Reuters Photo/Agoes Rudianto)

By : JG | on 12:46 PM August 22, 2017
Category : Business, Corporate News, Featured

Jakarta. The Supreme Court has annulled a government regulation on online car-hailing services after a finding that it contradicted higher laws and regulations.

The Ministry of Transportation imposed the regulation in April in a move to accommodate popular services such as GoJek, Grab and Uber in Indonesia's transportation system. The regulation included certain requirements, such as the registration of vehicles under the names of companies instead of individuals, a limit on the number of vehicles, and minimum fares, among others.

Partner drivers deemed the requirements detrimental to their incomes and launched an appeal with the Supreme Court against the implementation of the regulation. The court sided with the drivers during a hearing in June.

"The Ministry of Transportation will comply with the laws and regulations, including those of the Supreme Court," Hengki Angkasawan, head of communications and public information at the ministry, said in a statement on Tuesday (22/08). "Next we will coordinate with all parties for the best arrangement that can give equal space to all transport operators, especially with regards to road transportation," Hengki said.

In their appeal, partner drivers Sutarto, Endru Valianto Nugroho, Lie Herman Susanto, Iwanto, Johanes Bayu Sarwo Aji and Antonius Handoyo argued that the ministerial regulation limited their rights as small and medium entrepreneurs to earn an income. They also argued that the regulation seemed to favor conventional taxi operators.

The Supreme Court agreed with the arguments and ruled that 15 articles in the regulation contradicted higher laws and regulations. These are the 2008 Law on Micro, Small and Medium Enterprises and the 2009 Law on Road Traffic and Transportation.

The court declared the articles invalid and ordered the Transportation Ministry to revoke them. The articles include stipulations about company logos on cars, minimum and maximum fare limits, car registrations under company names, operational area limits and online car-hailing fleet quotas.

Transport Minister Budi Karya Sumadi said on Monday that the ministry will study the decision and come up with a new regulation within the next three months.

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