Thousands of public transport drivers protested against ride-sharing applications Uber and Grab at Jalan Medan Merdeka Selatan, Jakarta on Monday (14/03). (Antara Photo/Dean Wibowo)

GrabCar Forms Cooperative in Bid to Legally Operate in Indonesia

MARCH 16, 2016

Jakarta. Ride-hailing application company GrabCar announced on Wednesday (16/03) that it has formed a cooperative in a bid to legally operate in Indonesia, after the government attempted to shut down its operations following a massive protest from public transport and taxi drivers.

GrabCar Indonesia managing director Ridzki Kramadibrata announced that GrabCar drivers and car owners have formed the Indonesian Car Rental Cooperative (PPRI).

The new cooperative was officially recognized by the Ministry for Cooperatives and Small and Medium Enterprises on Wednesday, following talks between the company, officials from the newly established cooperative and the minister, Anak Agung Gede Puspayoga.

Ridzki said that with the cooperative formed, GrabCar is ready to comply with a series of requirements the government has set in order for drivers using the service to legally operate on Indonesian streets.

By establishing a legal entity, he said, the service can start paying taxes and have cars tested for road-worthiness and obtain a Transport Ministry permit, as demanded by the government.

The cooperative's chairman, Ponco Seno, said that establishing PPRI would also mean drivers will have access to life insurance.

“We already have a service center for 300 cars. In fact we are planning on cooperating with car manufacturers in terms of providing maintenance for cooperative members,” he said.

“The main reason why we established a legal entity in the form of a cooperative is to comply with the 2009 Law on Public Transport. So GrabCar is following all of the rules set by the government to operate in Indonesia.”

The presence of GrabCar along with similar ride-sharing application Uber, has been met with great criticism from taxi and public transportation operators since they were first introduced. Critics have said the newcomers should be banned for violating the 2009 Road Traffic Law, under which they are not recognized as a form of public transportation.

The argument has won over some key officials, most notably Transportation Minister Ignasius Jonan who issued a letter in November banning all app-based ride-hailing services, including motorcycle taxi apps GoJek and GrabBike. The move was overruled by President Joko Widodo less than 24 hours after the letter was issued, however.

Jonan again tried to ban GrabCar and Uber following a massive protest by taxi and public transportation drivers on Monday, this time requesting the Ministry of Communications and Information Technology to block the apps.

Representatives from Uber and Grab met with Communications Minister Rudiantara on Tuesday as well as representatives from the Transportation Ministry and the Jakarta Transportation Agency.

After the meeting, Rudiantara said the government would help both companies to comply with the necessary requirements to legally operate in Indonesia, adding that existing regulations must be adjusted to technological developments.

"There are laws, but the public also wants more comfortable and affordable public transportation services," Rudiantara said on Tuesday.