The Indonesian government has lowered the upper limit of fees paid by ride-hailing service drivers to platform companies from 20% to 8%.
According to the Singaporean daily Straits Times, President Prabowo Subianto attended a rally held at Jakarta’s National Memorial Square on Labor Day the day before and signed a presidential decree containing the content. In a speech on the same day, President Prabowo said, “You are the ones who sweat, but they are taking the money. I’m sorry, but I can’t,” and stressed, “The fee should be less than 10 percent.”
He also showed a tough attitude toward companies that do not comply with local regulations, saying, “If you are not going to follow our rules, you should not do business in Indonesia.”
The presidential decree included a rule that platform companies must provide auto and health insurance to drivers along with a reduction in fees.
The move is interpreted as a response to issues that have been demanded by ride-hailing drivers and labor unions for years. They have demanded lower platform fees, improved working conditions and recognition of formal workers who can receive government subsidies.
A Grab driver in Jakarta said, “I think this measure will increase our income by more than 10%,” adding, “I’m really happy.” The industry has expressed its position to follow the government’s policy. Grab Indonesia said it respects President Prabowo’s order and will cooperate with the government to protect drivers while maintaining the rates consumers can afford and industrial sustainability.
Gojek’s parent company, GoTo, which divides the local market with Grab, also said in a statement that it would do its best to comply with government regulations and provide benefits to both drivers and consumers.
Earlier in August last year in Indonesia, a motorcycle delivery driver was crushed to death by a police armored vehicle during a protest against the payment of a parliamentary housing allowance. Since then, large-scale protests have spread across the country, and drivers from Grab and Gojek have also actively participated in the protests.
JENNIFER KIM
US ASIA JOURNAL
