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Uber, Grab Pledge to Comply with Transport Minister's New Regulation


APRIL 22, 2016

Jakarta. Car-hailing apps Uber and Grab speak up over a new regulation issued by Transport Minister Ignasius Jonan earlier this month that could alter how the companies work with their drivers and limit their control over services provided to customers.

"We are reviewing the latest regulation. We remain committed to full compliance and are always willing to meet and work with the relevant authorities to continue serving the transportation needs of Indonesians, with the help of technology," an Uber spokesperson told the Jakarta Globe in an e-mail on Friday (22/04).

Grab, one of Uber's competitors, said the company is aware that some parts of the new regulation might affect the business model of app-based transportation services in the fast-growing industry.

"We are aware that some parts of the new regulation have worried our driver partners," Ridzki Kramadibrata, Grab Indonesia managing director, said in a statement on Thursday.

"We hope the government will also listen to our driver partners and look for a solution together," Ridzki said.

Under the new regulation, set to be effective by Oct.1,  Uber and Grab can only work with transportation companies that have been licensed by the ministry, instead of with individual drivers.

Grab drivers formed a co-operative in a bid to operate legally under the umbrella of the Indonesian Car Rental Cooperative (PPRI). Still, according to the regulation, Grab cannot control PPRI's driver recruitment process or determine passenger fares.

Transportation companies and co-operatives have also complained of higher costs as the government now requires them to open a car pool and maintenance facilities as well as subject their fleet under regular road-worthiness tests.

The government has barred the car-hailing apps from recruiting more drivers until they comply with the regulation.

Grab says it remains committed to comply with local laws and regulations on transport safety and tax, Ridzki said.

"We’ll continue to communicate proactively with all the relevant stakeholders, including the government, to better understand the new regulation and to achieve our joint objective of providing a safer and more convenient transportation service for all the people in Jakarta," he said.