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)

Uber, Grab to Comply With Government's Fare Cap


JULY 03, 2017

Jakarta. Ride-hailing services are set to comply with the government's new fare caps regulation, seeking to operate as usual.

"We will review the policy and make the necessary adjustments to ensure that our driver-partners will still earn the best income when using the Grab platform, Grab Indonesia managing director Ridzki Kramadibrata said on Monday (03/07).

Grab Indonesia head of public affairs Tri Sukma Anreianno said Grab is observing the impact of the new regulation and collecting inputs from its drivers and passengers.

An Uber spokesperson has told the Jakarta Globe the company received a copy of the regulation and its executives have booked a meeting with the Ministry of Transportation.

"We remain committed to working with the government to find a way that will accommodate the interests of customers and driver-partners, and support innovation, competition and customer choice," the spokesperson said.

The ministry started implementing the caps of Rp 3,500 (US 26 cents) to Rp 6,000 a kilometer in Java, Bali and Sumatra on July 1 for ride-hailing services such as Grab, Go-Jek and Uber. The government said the results of the new regulation will be assessed in six months.

Previous fares were lower than Rp 4,100 per kilometer charged in Jakarta by Blue Bird, the country's largest taxi operator. Blue Bird's closest rival, Express Transindo Utama, charged Rp 3,800 per kilometer. Both taxi operators have a flag fall of Rp 6,500.

Still, stock traders are betting on better financial performance of established taxi operators, expecting the regulation to diminish the threats from online ride-hailing services, which have been known for cheap pricing on the back of subsidized rides.

Blue Bird shares jumped 6 percent on midday to trade at Rp 5,100 a piece, its highest since April 8, 2016. Express shares increased nearly 4 percent to trade at Rp 119, beating the Jakarta Stock Index which advanced 0.57 percent to 5,862.77.