Uber, Grab to bow to Indonesian law
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JAKARTA - Leading ride-hailing applications Uber and Grab have agreed to establish a cooperative as their legal entity in order to ensure compliance with transportation laws, a minister has said.
Communications and Information Minister Rudiantara said the two companies had chosen to establish a cooperative, adding that he was set to meet Cooperatives and Small and Medium Enterprises Minister Anak Agung Gede Ngurah Puspayoga to help with the process.
"I don't know precisely why they've chosen to use a cooperative as their legal basis. Their permits are still being processed at the cooperatives ministry. I will talk with Pak Puspayoga on Wednesday to speed the process up," Rudiantara said in Jakarta on Tuesday.
On Tuesday, Rudiantara was summoned by President Joko "Jokowi" Widodo to discuss the transportation minister's request for the President to outlaw car-sharing apps. Joining the discussion were Transportation Minister Ignasius Jonan, Jakarta Transportation Agency head Andri Yansyah and the managements of Grab and Uber.
"We need to accommodate both sides. In Moscow, for example, the municipal government reached an agreement with Uber to register their cars, and limit their number," the minister said.
The 2009 Transportation Law, he acknowledged, did not regulate Grab Car and Uber. As such, the Transportation Ministry will revise the existing regulations, a Transportation Ministry decree and a transportation minister regulation, to accommodate them.
According to Rudiantara, the government understands that people need convenient and affordable services. However, he added that a level playing field was required for conventional services and newer app-based rides.
"Online applications are a necessity and cannot be stopped. Rather, they should be utilized for a more efficient process," he said.
About 2,000 members of the Land Transportation Drivers Association (PPAD) held a rally on Monday against the ride-hailing smartphone apps that they save have drastically reduced their revenue.
US-based Uber and Malaysia-based Grab have been at the center of a series of debates over the past year. Drivers of traditional motorcycle taxis, commonly known as ojek, have also protested against Grab Bike and homegrown company Gojek for eroding their market shares.
