Time’s running out for Uber and Grab to comply with new Indonesian law

Illustration by Tech in Asia’s Kathrinna Rakhmavika.

Back in April Indonesia released new regulations to govern ride-hailing companies like Uber and Grab.

The deadline is coming up in one more month.

It was an uneasy victory for the startups. On the positive side, the new transportation law acknowledged their existence. But it also put up many more hoops for Uber and Grab to jump through to fulfill the government’s requirements.

Ride-hailing companies were given a six-month “tolerance phase” to get their affairs in order – which means they have one more month.

Ongoing headache

Three requirements in particular are still causing ride-hailing startups and their drivers headaches.

One, all cars participating in ride-hailing networks need to pass a road-safety test, known as KIR. A second requirement is that all drivers need to upgrade their driver’s licenses to one which allows them to transport other people, the same license needed for driving public transport vehicles. It’s known as SIM A Umum. The third has to do with whom the vehicle is registered to. According to the new laws, the car needs to be registered to a business, not an individual. Even though an attempt had been made to broker a solution for this last requirement, it remains unsolved until today.

Why drivers are hesitant

One reason drivers are hesitant to participate in the KIR test is that the result can negatively affect the insurance value of the car.

Another reason is time: getting paperwork done, like the KIR test, drivers’ licence, or vehicle registration, is cumbersome. Bureaucracy in Indonesia isn’t known for its efficiency. This photo from CNN Indonesia allegedly shows cars from ride-hailing networks in a long queue, waiting to be processed.

Cars queuing up to get paperwork done. Photo credit: CNN Indonesia.

Getting there

How many cars and drivers have achieved full compliance?

Grab won’t reveal those numbers.

“We are currently still in the process of assisting and ensuring our driver partners are able to fulfill the requirements, including on the KIR Test and [SIM A Umum],” a Grab spokesperson told Tech in Asia.