Brief: Win for ride-hailing apps as Indonesia overthrows key transportation rules

Ridzki Kramadibrata, managing director of Grab, speaking on behalf of Grab, Go-Jek, and Uber, at a press conference protesting the ministry of transportation’s ride-hailing rules in March this year.

The news (extracted from Katadata):

• Indonesia’s supreme court, the country’s highest judiciary institution, has overthrown key parts of the regulatory framework that affect ride-hailing companies like Uber, Grab, and Go-Jek.
• 18 paragraphs were ruled to be in conflict (PDF link) with existing laws regulating SMEs and the transportation sector and declared ineffective.
• Among the passages up for removal are those calling for an upper and lower limit for ride-hailing app tariffs, as well as restrictions on driver recruitment and promotions.
• The supreme court’s decision came in June, but today the transportation minister told media tthat he is aware of and will respect the ruling.

Why it matters:

• It should come as a relief to ride-hailing startups who were faced with having to significantly change the way they operate to achieve compliance. The three biggest ride-hailing rivals in Indonesia – Grab, Uber, and Go-Jek – even came together in a joint protest earlier this year.
• The supreme court’s decision might raise tensions again between the traditional taxi industry and ride-hailing operators. When the ministry of transportation introduced the new rules affecting ride-hailing last year, this was seen as a move to reach a compromise between incumbents and transportation innovators.