Safety is top priority in new ride-hailing regulations in Indonesia

A driver and passenger ride on a motorbike, part of the Go-Jek ride-hailing service, in central Jakarta, Indonesia. Indonesia has three major ridehailing operators; Go-Jek, Uber and Grab.
A driver and passenger ride on a motorbike, part of the Go-Jek ride-hailing service, in central Jakarta, Indonesia. Indonesia has three major ridehailing operators; Go-Jek, Uber and Grab.PHOTO: REUTERS

JAKARTA (THE JAKARTA POST/ASIA NEWS NETWORK) - The government will require all online ride-hailing operators to provide insurance for both drivers and passengers, limit the size of their fleets, and apply minimum and maximum fares in its upcoming revised regulation.

Some of the requirements, such as the fleet and the fare restrictions, were annulled by the Supreme Court in August. However, the government has insisted that such stipulations are necessary to create a level playing field for conventional taxis and to ensure safety.

"The government certainly wants the public to avail of the best service, which provides comfort with affordable prices and safety," Transportation Minister Budi Karya Sumadi said on Friday.

The revised regulation, said Budi, would take effect on Nov 1.

Under the draft revision, legal entities, like cooperatives, that provide application providers with fleets are required to pay insurance premiums as stipulated in the Traffic and Land Transportation Law, which requires insurance for all public transportation modes.

Budi added that the insurance was also a way for the government to protect the online drivers.

"The required insurance will protect them (the drivers). Currently there is no such protection," he said.

The Transportation Ministry's transportation and multi-mode director Cucu Mulyana said the insurance was a component of the minimum and maximum fares.

"Phone credit (for ride-hailing operations), tax and insurance will be considered in the calculation of the fares," he said.

The ministry has reiterated that the regulation on the fares is still required to protect passengers from excessive surges in fares at peak times, while a base fare is required to prevent any ride-hailing firm from engaging in unfair business practices.

The fare arrangements are unlikely to be different from the previous regulation, including the maximum fare of Rp 6,000 (S$0.60) per km and base fare of Rp 3,500 per km for areas such as Sumatra, Java and Bali.

Indonesia has three major ridehailing operators; Go-Jek, Uber and Grab. The three have already forged cooperation to provide fleets with conventional taxi operators, such as Bluebird and Express.

Uber driver cooperative partner Jasa Trans Usaha Bersama (JTUB) secretary general Musa Emyus said the cooperative had already provided insurance for passengers and drivers for at least two years.

Musa said the insurance was mandatory for a transportation firm, hence many Uber drivers already paid premiums to state-owned insurance firm PT Jiwasraya.

"Even if a driver dies on the job, there is insurance to cover him. However, if there is an accident and the driver and the passenger are unharmed, then that is not insured," he said.

Transportation expert from the Indonesian Transportation Society (MTI) Danang Parikesit said that even though the insurance policy was laudable, the government needed to also address disputes between passengers and drivers.

"For example, where the driver promises to come in four minutes, and he does not come, and the passenger cancels only to be charged a penalty. Who will take care of such incidents?" he said.

He noted that with almost one million ride-hailing drivers in Greater Jakarta alone, background checks on the drivers by the ridehailing providers were insufficient, with the potential for disputes to arise.

The government also needed to examine the financial reports of the ride-hailing apps, to see whether their business plans affect safety standards, such as the case with low-cost airlines, he added.