The Indonesian government is set to fix rates for online ride-hailing services such as Go-Jek and Grab, starting from 1st May 2019. Motorcycle service providers will only be allowed to charge rates according to a fixed band set by the government – a move that might prevent the expansion plans of ride-hailing services.
Motorbike hailing rates will reportedly range from Rp 1,850-2,600 per kilometre, depending on various zones in the city and the distance travelled. Budi Setyadi, Director General of Land Transportation at Indonesia’s Ministry of Transport, said that the range for the tariffs have been decided following extensive discussions with all parties, including drivers, consumers associations, and Indonesia’s anti-monopoly watchdog. The area around the SCBD, Thamrin, Kuningan, and central Jakarta will be part of a zone with a higher tariff of 8,000 to 10,000 rupiah per ride of up to four kilometres.
Singapore-based Grab and local start-up Go-Jek have been in strong competition over the last few years in terms of price and services. Both ride-hailing giants provide banking, e-commerce, and food delivery services. They have each been funded by some of the largest private investors in the world. According to analysts, fixed fares would impact the companies’ ability to offer discounted fares. It would also make them compete less with other modes of transport. Since 2018, drivers of Go-Jek and Grab have held numerous protests demanding higher fares and better conditions. Previously in 2017, Indonesia’s Supreme Court ruled against The Ministry of Transport’s attempt to fix ride-hailing rates for cars and motorbikes, after the drivers claimed that the rules favoured taxi firms.
Source: Channel News Asia
Image: Kompas