The Jakarta police’s Uber investigation raises many questions, and is likely just to appease taxi firms

Following the detainment of five Uber drivers last week, Jakarta police have launched a full-fledged investigation into the legality of the startup in Indonesia. Thanks to our friends at The Financial Times, we now know that the investigation is the result of local taxi companies rallying against the ridesharing app, and submitting a formal complaint. The drivers were released from custody this week, but the Organization of Land Transportation Owners (Organda) is spearheading the investigation.

Organda chairman Shafruhan Sinungan says Uber is operating without the proper license to be a transport company in the archipelago. He also admits that Uber poses a huge competitive risk for local taxi firms. These include names like Blue Bird and Express.

Alan Jiang, acting head of Uber in Indonesia, contests that the investigation is the result of a misunderstanding of what Uber actually is. He says his firm is fully compliant with the law and has the proper accreditation (likely as an internet company).

This is a real thorn in Uber’s side in Jakarta. It’s already having trouble competing with GrabTaxi and motorcycle-based startups Go-Jek and GrabBike (a product of GrabTaxi). The investigation is sure to slow down Uber’s aggressive expansion in the region, but in fact, there are deeper questions worth answering.

See: GrabBike and Go–Jek prepare for a street fight in Indonesia

If Uber is an illegal service in the eyes of the Indonesian law, should GrabBike and Go-Jek be investigated as well? Last I heard, Jakarta governor Ahok was a fan of Go-Jek and even spoke to Nadiem Makarim about how the service can complement public transportation in Indonesia. Do the taxi companies not care about the customer base that goes for motorcycle transport?

It seems like this investigation is inconsistent with what should be. Why is there no investigation into GrabTaxi? Is it because that app helps the taxi companies instead of Uber’s service which gives opportunities to people with private vehicles? Surely, GrabTaxi acts as an arms dealer to not just one taxi company, but the competitors as well. Is it possible that the taxi companies are simply flexing their muscles to keep their market shares?

What are your thoughts on this guys?

Featured image by Tekkebln; lead image by nseika; second image from Wikimedia.