Indonesia ready to regulate motorcycle taxi fares

Indonesia ready to regulate motorcycle taxi fares

Reports of a government plan to regulate the fares of app-based motorcycle taxis have given some hope to Fariz, a driver who switched to an app-based service from a regular one six months ago.

"Food prices and other prices have soared and I am barely keeping up to make ends meet with the current rate," he told Asia Focus during a recent ride through the notorious Jakarta traffic that has made such services popular in the absence of reliable public transport network.

"If this is real, I hope I will be able to bring more money home as one of my kids is starting elementary school this year."

Fariz, who like many Indonesians uses only one name, said he could earn up to 200,000 rupiah (US$14 or 450 baht) for a 10-hour day, depending on tips.

"There are users who tip generously when they get the low rate promotion," he said, adding that he switched to driving a motorcycle taxi full time after he was laid off from his job as an office boy in a garment factory when it moved from Jakarta to Central Java early last year.

He worked for a few months as a regular motorcycle taxi driver, waiting for his turn in a drivers' queue near a commuter train station in South Jakarta, until he could afford to buy a smartphone and sign up with an app-based provider.

Indonesia's Ministry of Transportation announced earlier this month that it is working on a formula to regulate fares, which could take effect by the end of March.

Ahmad Yani, the ministry's public transport director, said officials had been in talks with all stakeholders to devise rules that would focus on safety, fares, partnerships and suspensions.

"The ministry exercises its discretion to issue a regulation on app-based motorcycle taxis. Even though it has not acknowledged that motorcycles can be used as a taxi service, their presence is palpable so we have to regulate it whether we like it or not," Yani told Asia Focus.

The 2009 Traffic and Land Transportation Law does not recognise two-wheeled vehicles as a public transport mode. The Constitutional Court in June last year rejected a petition filed by 54 drivers to change the law.

Yani said discussions with drivers and ride-hailing firms were expected to result in a fixed minimum and maximum tariff per kilometre. He said the rates would be more realistic than those being charged now, by taking into account factors such as operating costs, margins and customers' willingness to pay.

The regulation is also expected to cap working hours at between eight and 12 per day to avoid exhaustion, he added.

Go-Jek spokesman Michael Reza Say told Asia Focus that the local ride-hailing market leader would respect whatever decision the government made, but declined to comment further as he hadn't seen details of the regulation.

"We do hope that the government policy can accommodate various aspirations in regard to the welfare of our partners (drivers) who are self-made entrepreneurs, the sustainability of the small and medium enterprises that we partner with, and our users' convenience," he said.

Drivers from Go-Jek and rival Grab have been holding rallies demanding higher fares and better working conditions. In November, Go-Jek drivers gathered at its South Jakarta headquarters in protest against a rate decrease from 2,200 rupiah to 1,600 rupiah per kilometre. The company said the cut was necessary in light of competition that affects supply and demand.

Go-Jek, which is valued at more than $10 billion, is moving into Vietnam, Thailand, Singapore and the Philippines under a $500-million expansion plan announced in June last year, while Grab operates in eight countries in Southeast Asia.

Services offered by Go-Jek's Thai partner GET are now available in 14 areas of Bangkok. In Singapore it offers car-hailing service throughout the island. But in the Philippines, the Land Transportation Franchising and Regulatory Board recently rejected its request to operate locally. The two sides are still negotiating.

Grab Indonesia didn't reply to repeated inquiries from Asia Focus for its view on the proposed Indonesian regulations. The Singapore-based firm last August increased the minimum fare per motorcycle ride from 5,000 to 7,000 rupiah and the rate per kilometre from 1,600 to 2,300 rupiah.

Transport analyst Djoko Setijowarno said the formulation to determine fixed fare ranges could be used as a reference by city administrations across the archipelago.

"Each region would have a different calculation in accordance with local economic conditions," he told Asia Focus. Go-Jek services are available in 50 cities across Indonesia, while Grab is available in 139 cities.

Mr Setijowarno said the regulations might not advance the cause of recognising motorcycles as a legal taxi service, but would help to ensure safety and fairness to both drivers and users.

"This is just temporary. People are in transition to switch to use public transport as the government continues to build and revamp a more reliable public transport network," he said.

Jakarta's first and long-delayed mass rapid transit rail system is expected to start operations in March. Work on the light rapid transit network connecting downtown Jakarta with suburban areas is also speeding up with the first line connecting areas in East and North Jakarta due to be operational by the end of February.

Bambang, who works as a clerk at a hospital in the suburbs of Jakarta but moonlights as a motorcycle taxi driver, welcomed the news about the impending regulations as they could help stabilise his income. He earns up to 700,000 rupiah a week from driving, but on occasion when he runs short of money he has to pawn his bike.

"I just got back on the road two days ago, I was finally able to reclaim it after I sent the motorcycle to school for a month," he said, using the popular slang for pawning a possession.

"I just hope that the regulation would be fair for both drivers and users. I have customers who told me they really rely on this service."

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