JAKARTA, July 2 (Reuters) - 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 U.S. 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 ($0.26-$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.
Drivers of Blue Bird and Express have called for a ban on ride-hailing services, claiming they were subject to less stringent requirements than conventional taxis. (reut.rs/1RgSf0M0)
Uber said in an emailed statement it had yet to receive a copy of Indonesia’s regulations.
“However, we remain committed to working with the government to find a path forward that accommodates the interests of riders and driver partners and supports innovation, competition and customer choice,” Uber said.
Grab and GO-JEK did not immediately respond to requests for comment.
$1 = 13,325.00 rupiah Reporting by Agustinus Beo Da Costa and Eveline Danubrata; Editing by Mark Potter