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New regulation on the motorcycle taxi – “ojek”

New regulation on the motorcycle taxi – “ojek”

The aim of Reg 12/2019 is to prevent misconduct related to motorcycles used as a means of public transportation (ojek - motorcycle taxi), for both online ojek (app based) and offline (conventional) ojek. Previously, ojek was not clearly regulated by the MoT. Under the Reg 12/2019, MoT now requires all motorcycles which are used for ojek (both online and offline) to fulfill the following aspects:

  1. safety;
  2. security;
  3. convenience;
  4. affordability; and
  5. regularity.

Some legal implications based on Reg 12/2019 requires online ojek to be in compliance with the following matters:

Information regarding passenger’s identity

In relation to improve passenger safety, Reg 12/2019 require app providers to ensure that there will be a statement from the account owner regarding the actual passenger data when the account owner make a booking for someone else. However, it is still unclear on what it means by making a statement of the actual passenger data (e.g. does the app provider is required to facilitate/develop a new feature on its app so that the account owner may inform to the ojek driver about the details of the actual passenger or just by stating that the account owner is not the actual passenger).

Pick up and drop off area

All app providers are now required to provide a specific area for passenger pick up and drop off to reduce traffic congestion. Currently, there were only specific places in which passenger pick up and drop off area are provided (e.g malls). Many places in metropolitan cities like Jakarta for instance, did not have sufficient passenger pick up and drop off area and this condition leads to traffic congestion. From the redactional article 8 letter b of Reg 12/2019, it appears that app providers are now required to provide passenger pick and drop off area in all corner of the city. However, we expect there will be a clarification from the MoT in which places, app providers are required to provide passenger pick up and drop off area, since, it might sound not practicable to build passenger pick up and drop off area in all corner of the city.

Tariff

Tariff setting formulation specifically for an online ojek is now covered on Reg 12/2019. In general, the online ojek tariff will be determined by app providers after consulting with relevant stakeholders and by considering the following aspects

  1. direct cost; and
  2. indirect cost.

Direct cost consists of:

  1. vehicle depreciation;
  2. capital interest;
  3. driver;
  4. insurance;
  5. vehicle taxes;
  6. fuel expenses;
  7. tires;
  8. service and maintenance;
  9. depreciation of telephone cellular;
  10. internet quota; and
  11. driver’s profit.

Meanwhile, indirect cost means the application rental fees. Nevertheless, Reg 12/2019 is silent on a specific base tariff and per kilometer tariff for an online ojek service. Further, it is still unclear on the time frame and mechanism for the tariff adjustment, thus, drivers and app providers are less certain on this matter. Please be informed, since it is related to public interest, practically, the MoT and other relevant ministers may also be involved in tariff adjustment procedure, even if it is not clearly stated on the regulation. We expect that the MoT will provide clearer tariff adjustment mechanism, including base tariff and per kilometer tariff for an online ojek on the implementing regulation to make drivers and app providers more certain.

Actions to Consider

Reg 12/2019 was designed to make ojek as a safe public transportation. It takes into effect starting its enactment date, which is on 11th of March 2019. However, in order to actualize the main purpose of the regulation, some provisions need to be further clarified by the MoT through its implementing regulation. In the meantime, we suggest app providers to prepare standard operational procedures (SOP) for temporary operational suspension (suspend) and termination of drivers as mandated by Reg 12/2019, which at least govern the following aspects:

  1. type of sanction for temporary operational suspension (suspend) and termination of drivers;
  2. level of sanction for temporary operational suspension (suspend) and termination of drivers;
  3. the stage of sanction and operational temporary suspension (suspend) and termination of drivers; and
  4. revocation of such sanctions.

 

For further information, please contact:

Anggia Rukmasari, Partner

email : anggia@bahar.co.id

mobile: +628122160851