In Indonesia, Uber’s ‘green light’ changes to orange

One step forward, one step back for Uber in Indonesia. After the company last week claimed to have received the “green light” from Jakarta’s Governor to operate in Jakarta, the governor responded that he had never made such remarks and that Uber’s statement was a “one-sided claim.”

How did this misunderstanding come about, and what does it mean for the company?

The big meeting

Uber’s statement on Tuesday last week followed a milestone meeting between Uber, GrabTaxi, Jakarta governor Basuki Tjahaja Purnama (often referred to by his nickname Ahok), and Jakarta’s transportation agency (Dishub).

There’s a recording of the meeting:

Governor Ahok clearly states his support for ride-sharing apps like Uber and GrabTaxi, welcoming the competition they bring. He lashes out at the Dishub on several occasions, saying it was not quick enough to adapt to the new era and failed to provide adequate safe and affordable transportation options for Jakartans.

The meeting was a breakthrough because the parties for the first time collectively laid out the rules that app-based transport companies need to follow to operate in Jakarta.

So is Uber legal?

Uber’s application to set up a foreign technology company in Indonesia has been accepted and is currently being processed by the Indonesian Investment Coordinating Board (BKPM).

Karun Arya, Uber’s spokesperson in the region, tells Tech in Asia that Uber has completed six out of the ten points required for a foreign company to set up shop. You can look up here what these ten points entail. Karun expects the set-up process to be finalized by early next year.

GrabTaxi, Uber’s competitor in the region, is actually a step ahead in this process as it has already established a local company.

The more complicated question, however, is that of the legality of the cars in Uber’s network.

Uber works with independent “driver partners,” as the startup likes to call its uncontracted workers, who themselves have to comply with a set of rules before they can join Uber. For example, they cannot join as individuals, but need to be part of a car-hire company. For this reason, several such companies have recently sprung up in Jakarta – “more than 100,” according to Karun.

Car-hire companies need an operational license from Dishub. This process has previously been a bottleneck. “There used to be a quota,” Karun explained. Dishub would only give out a certain number of those licenses a year.

If you watch the video documenting Monday’s meeting, you can hear Mike Brown, Uber’s regional manager for APAC, make the case for this quota to be lifted (30m 29s).

Unfortunate wording