The Gojek driver is being treated for his injuries. (Reuters Photo/Beawiharta)

Lawmakers to Address the Rapid Rise of Transport Apps in Indonesia

JULY 02, 2015

Jakarta. Indonesia's lawmakers are planning to start deliberations on a new law that would address the rapid growth of smartphone-based transportation apps, according to a government official.

The new law would regulate the increasingly popular services, which otherwise fall into a grey area in Indonesia's existing transport regulations.

Yudi Widiana,  vice chief of the commission V which oversees transport, public works, housing and rural area issues at the House of Representatives (DPR), confirmed that the House is planning a special assessment on the the issue, noting the legal and safety concerns surrounding these mobile apps.

"We're not trying to impede innovation, but these services must clearly explain what their core business is," he said during a radio discussion in Jakarta on Wednesday.

"These apps are popping up based on public demand. We're willing to make some room and initiate a new law."

Malaysia's cab-booking app Grab Taxi, homegrown motorcycle jockey app Gojek and California's ride-sharing app Uber have become household names among commuters in large Indonesian cities like Jakarta, offering an alternative for residents to maneuver through heavy congestion.

Grab Taxi Indonesia,  a local unit of Malaysia's Grab Taxi, rolled out operations in Jakarta in June last year. The cab-booking smartphone application is now present in Surabaya, East Java, and Padang, West Sumatra. It expanded its reach to include motorcycle jockeys with Grab Bike in May.

Meanwhile, Gojek has hired over 10,000 motorcycle drivers in Jakarta since its establishment in 2011, offering a range of services from transport to couriers.

Since its launch in Jakarta last August, Uber Technologies now offers the Uber app in three cities: Jakarta, Bali and Bandung. The San Francisco-based company offers two types of services, the premium Uber Black and its low-cost alternative UberX.

Despite their apparent success, the ride has not been smooth  for these companies as their unconventional business models continue to face scrutiny from traditional cab operators and law enforcement officials.

Last month, the Jakarta Police detained five drivers who had used the Uber app to pick up passengers, following reports from the Jakarta Transportation Agency and the Organization of Land Transport Operators (Organda).

"We have to be consistent with government regulations," Jakarta Transportation Agency chief Benjamin Bukit said regarding the arrest.

"But considering the rise of these smartphone apps, [the House] should swiftly acknowledge the trend and create an IT-based law."

Gojek's founder Nadeem Makarim welcomed the government's recent efforts, stressing that the core essence of the regulations must be passengers' safety.

"I will follow up with Pak Yudi on how we can create a legal structure and also maintain safety," Nadeem said.

"But let's not worry about fare pricing or taxing the drivers, because I don't think that's conducive. Think about the public and what they need first."

Joshua Ho, who is in charge of international expansion in Indonesia at Uber, shared a similar sentiment, pointing  to the Philippines as an example for the Indonesian government.

"The Philippines is a great example of a market that has achieved a regulated outcome. We've come to terms with the government. We've decided to join forces as opposed to reject one another," he said.

The Philippines was the first country in the world to issue a nationwide ride-hailing regulation, which allowed Uber to legally operate throughout country. Under the regulation, all Uber drivers are required to register with Philippine transportation authorities.

As the use of these transportation apps continues to spread across the country, the government's urgency in responding to the rising trend is critical in order to ensure order and most importantly, passengers' safety, said one transport expert.

"In reality, Uber and other similar apps would not exist if people didn't need them. If that was the case, then the apps would die," said Purnomo, secretary general of the Indonesia's Transportation Society.

"Whether we want to or not, there needs to be a breakthrough to address this issue," he said. "There's something new [in the market] and we must quickly respond to it."