Indonesia Finalizes Online Motorcycle Taxi Rules, What Will Change?

TEMPO.CO, Jakarta – The Indonesian government is finalizing a presidential regulation governing the online transportation ecosystem, including motorcycle taxi services, as authorities work on a new business model for the industry.State Secretary Prasetyo Hadi said the government held another coordination meeting to finalize the regulation, with most of its key provisions already agreed upon."We held another coordination meeting yesterday to finalize the presidential regulation on online motorcycle taxis. We have managed to formulate almost all of the substantive principles," Prasetyo told reporters at the Presidential Palace complex in Jakarta on Tuesday, reported by Antara.He said one of the remaining issues was completing the formula for the updated business model for online transportation services."This will not affect the substance. We are only completing the formula," he said.So, what will change once the regulation is issued?Drivers Could Receive MSME StatusOne of the proposed changes is the classification of online motorcycle taxi drivers as micro, small and medium enterprises (MSMEs).Minister of Micro, Small and Medium Enterprises Maman Abdurrahman said the status would give drivers greater flexibility in determining their working hours and allow them to access government incentives available to MSMEs.The classification would also recognize online motorcycle taxi drivers as small-business operators rather than simply workers operating through digital platforms.Maman said the government would not impose additional taxes on drivers who receive MSME status, citing their monthly income of around Rp10 million to Rp15 million.Online Platforms Face an 8% Commission CapAnother change already being implemented concerns the commission charged by online transportation platforms.Prasetyo said several platforms had begun implementing President Prabowo Subianto's instruction to limit commissions to 8 percent.The commission limit is intended to ensure that drivers retain a larger share of their earnings while allowing platforms to continue operating their services.The government is incorporating the policy into the presidential regulation so that its implementation has a clear legal framework.Business Model to Be ClarifiedThe government is also working on a new formula governing the business model of online transportation services.Prasetyo said the government wants to ensure that the regulation does not disrupt existing operations once it takes effect.The final formula is being designed to reflect conditions on the ground and ensure that the regulation can be implemented without creating disruptions for drivers, platforms or passengers.Around two provisions concerning online motorcycle taxis were still under discussion as of Monday, according to Maman.When Will the Regulation Take Effect?The presidential regulation has not yet been issued. The government had previously targeted its completion before Indonesia's 81st Independence Day on August 17.Prasetyo said the government was now focused on completing the remaining provisions and formulas before issuing the regulation.Read: Indonesia's July Consumer Confidence Index Stays OptimisticClick here to get the latest news updates from Tempo on Google News