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Government Crafts Presidential Regulation To Govern Online Ride-Hailing Services
A new Presidential Regulation is being formulated to establish definitive rules for Indonesia's online ride-hailing industry, aiming to end regulatory ambiguity and protect all stakeholders. (Firda Cynthia/detikcom)
Jakarta, Indonesia - Regulatory certainty for Indonesia's massive online transportation sector is on the horizon as the government commits to enacting a dedicated Presidential Regulation (Perpres). This high-level policy instrument is being crafted to address the fundamental legal and operational questions that have surrounded app-based mobility services since their inception. The move aims to transition the sector from a period of disruptive growth and frequent conflict into a phase of stable, regulated maturity that benefits the national economy.
The impetus for a Perpres arises from the limitations of previous regulatory attempts. Guidelines issued by the Ministry of Transportation and the Ministry of Communication and Information have often been reactive, partial, and difficult to enforce uniformly. The lack of a cohesive national law has allowed conflicts to fester, particularly in major cities where online drivers and conventional transport operators compete directly for passengers. The Perpres is expected to fill this legal vacuum with authoritative provisions that cannot be easily ignored or overridden by local bylaws.
A primary focus of the regulation will be the economic relationship between platforms and driver-partners. Issues such as the transparency of algorithm-based fare and allocation systems, the fairness of commission or service fee rates, and the provision of dispute resolution channels are slated for detailed regulation. The government intends to ensure that the digital platform model does not lead to the exploitation of drivers, who are currently classified as independent partners rather than employees with associated rights and benefits.
The drafting process is being coordinated by the Office of the Presidential Staff (KSP) in collaboration with relevant technical ministries. This includes the Ministry of Transportation for operational and safety aspects, the Ministry of Manpower for labor-related concerns, and the Financial Services Authority (OJK) for matters pertaining to digital payments and insurance products embedded within the apps. This cross-institutional approach is crucial for creating a holistic regulation that covers all facets of the industry.
President Joko Widodo's administration views this regulation as essential for social stability and inclusive growth. The online transportation sector has been a double-edged sword: a celebrated innovation that provides flexible income opportunities, but also a source of tension when driver incomes are squeezed or when traditional livelihoods are threatened. By providing a clear legal framework, the government hopes to mitigate these social frictions and ensure the sector's growth contributes positively to reducing unemployment and improving urban mobility.
The regulation also has significant implications for Indonesia's investment climate and digital sovereignty. Clear and fair rules will provide long-term certainty for both domestic and foreign investors in the tech sector. Moreover, by setting data localization requirements or standards for platform accountability, the Perpres could shape how much control Indonesia retains over the data and economic value generated within its borders by global tech giants.
Despite the proactive stance, significant debates are ongoing behind closed doors. One of the most contentious issues is whether the regulation will move towards recognizing drivers as formal workers with set wages and benefits, a model that platforms vigorously resist. Another debate centers on limiting the total number of vehicle permits to reduce congestion and oversupply, a measure drivers fear would restrict their access to the market.
The announcement of the forthcoming Presidential Regulation has been met with cautious optimism. While stakeholders agree that clear rules are desperately needed, opinions diverge sharply on what those rules should be. As the government finalizes the draft, its ability to strike a delicate balance between fostering innovation, ensuring fair competition, and protecting labor will determine whether this Perpres becomes a landmark success or another source of contention in Indonesia's evolving digital landscape.
(Baasim Ghava)
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