Uber and its rivals have six more months to deal with price caps and other limitations in Indonesia (Updated)

An Uber driver in Indonesia. Photo credit: Uber.

Update July 5: Indonesia’s ministry of transportation has agreed to extend the “tolerance phase” for ride-hailing regulations by another 6 months, as reported by local media (link in Indonesian). This means ride-hailing startups will have more time to comply with government rules, which were released more than a year ago. The deadline for enforcement has already been extended multiple times.

Below is the original story.

As of July 1, major ride-hailing apps in Indonesia like Uber, Grab, and Go-Jek are facing new rules, which might affect the way they operate.

Over the weekend, the ministry of transportation announced per-kilometer price caps for ride-hailing companies. The new fares for ride-hailing startups are close to those of regular taxis.

In addition to price caps, ride-hailing startups might have to adhere to government-set limits in fleet size. Furthermore, all cars driving for ride-hailing networks must be licensed to a commercial entity or cooperative, which makes it more complicated for private car owners to sign up.

These three points were the last to come into effect from a list of ride-hailing rules (PDF) set by the ministry of transportation last year.

They were also the most controversial. In March, all three major ride-hailing firms in Indonesia joined forces in a last effort to convince the government to reconsider – to little effect.

Ridzki Kramadibrata, managing director of Grab, speaking on behalf of Grab, Go-Jek, and Uber, at a press conference in March. Photo credit: Grab.

Other points in the regulation, like requiring cars to pass a road safety test, were made official in the past months.

All rules imposed by the government are meant to give protection to drivers and customers of ride-hailing apps, a ministry representative said at a media briefing on the weekend, CNN Indonesia reported. They also intend to create a balance between all transportation providers.

Still cheaper than taxis

The lowest acceptable per-kilometer fare is still slightly cheaper than what regular taxis cost now.

Under the new rules, ride-hailing firms must charge at least US$0.26 per kilometer on each car ride, and no more than US$0.45/km. This rate applies to Sumatra, Java, and Bali – Indonesia’s most densely populated islands. In the rest of Indonesia, the price range goes from US$0.28/km to US$0.49/km, according to CNN.

Long-term effects unclear