Indonesia plans to standardise rates for Grab and Go-jek, curtailing their bold expansion plans
- Over the past year, motorcycle taxi drivers working for Grab and Go-jek in Jakarta have held protest rallies calling for higher fares and better conditions
- Indonesia’s Supreme Court blocked a previous transport ministry attempt to fix ride-hailing rates in 2017 after drivers sued
Indonesia is preparing to launch regulations fixing the rates drivers and riders for ride-hailing services such as Grab and Go-jek receive, two government officials said, creating potential obstacles for the companies’ expansion.
The regulations would meet drivers demands for more oversight and higher rates but there are concerns that the rising costs to the companies could stifle their development as they battle to dominate the ride-hailing market in Southeast Asia’s biggest economy.
Singapore-based Grab and home-grown Go-jek have been locked in price wars in Indonesia, part of a wider fight to bring banking, e-commerce, ride-hailing, food-delivery and other services to every corner of Southeast Asia.
However, since 2018, motorcycle taxi drivers working for Grab and Go-jek in Jakarta have held protest rallies calling for higher fares and better conditions.
Indonesia’s Ministry of Transportation plans to implement minimum and maximum tariffs for car and motor bike ride-hailing that will be “higher than Go-jek and Grab’s current rates” and impose limits on promotional price cuts, said Budi Setyadi, director general of land transportation at the ministry.
“This is for the safety and protection of drivers,” he said.
Grab and Go-jek have told me they would prefer there was no regulation
The ministry’s public transportation director Ahmad Yani said a dependency on incentive-driven payments and low fixed rates per km was a safety risk as it led to drivers overworking. Yani said Grab paid 1,200 rupiah (US$0.085) per km with a focus on bonuses, while Go-jek’s rate was 1,400 rupiah (US$0.099) per km.
