Indonesia sets tariff ranges for online car-hailing services
JAKARTA: Indonesia has set minimum and maximum tariffs for online car-hailing services, aiming to ensure comparable pricing with conventional transport providers whose drivers have complained about being undercut by their newer competitors.
Ride-hailing services such as US group Uber Technologies Inc, Southeast Asia’s Grab and Indonesia’s GO-JEK have heavily subsidised their drivers in Indonesia in order to gain market share in the country of 250 million people, analysts say.
The transport ministry said it had set a tariff range for online car-hailing services of 3,500-6,000 rupiah (US$0.26-US$0.45) per kilometre for the islands of Java, Bali and Sumatra. For Kalimantan, Sulawesi, Nusa Tenggara, Maluku and Papua, the range is 3,700-6,500 rupiah per kilometre.
The regulation kicked in on July 1 and will be evaluated in the next six months, the ministry said in a statement.
“There has to be a balance between conventional and online transport, so that has to be regulated,” Pudji Hartanto Iskandar, director-general of land transport at the ministry, told Reuters by phone.
Indonesia’s two biggest established taxi operators are PT Blue Bird Tbk and PT Express Transindo Utama Tbk , whose shares have fallen on investor concerns about competition from the cheaper ride-hailing services. — Reuters