The Indonesian government is giving ride-hailing app companies five months to adjust to new regulations for the taxi industry issued by the Transportation Ministry, which come into effect on 1 April.
Transportation Minister Budi Karya Sumadi said his office would be tolerant to ride-sharing companies through to August before the regulations are fully enforced and violators are punished, The Jakarta Post (JP) reported.
The new regulations include a fare ceiling and floor to avoid price wars and protect consumers from excessive surge pricing rates, and fleet quotas for ride-sharing app partners.
Sumadi said ride-hailing app operators and conventional taxi companies must be ready to compete fairly to ease tension among drivers, the JP reported. He said the current practices of ride-hailing app providers were not fair to conventional taxi companies because the former can reduce rates to attract passengers in off-peak hours, but increase them during the peak hours.
“There is no fair competition. Therefore, we are regulating it,” he said.
Major ride-hailing apps including Grab and Uber expressed strong opposition to the new regulations in a joint statement.
Grab and rival Uber have faced a number of regulatory obstacles in Indonesia. The government last year warned operators of taxi-hailing services it would more tightly enforce new regulations. Under Indonesian traffic law it is illegal for an individual to provide public transport services – drivers must obtain special licenses and operate as part of a cooperative or company.
In December, Uber teamed with Indonesia’s second largest taxi operator, Express, to launch a pilot car-booking programme.