Indonesian Supreme Court Rules out the New Tariff Laws Established Specifically for Ride-Hailing Services

Indonesian Supreme Court Rules out the New Tariff Laws Established Specifically for Ride-Hailing Services

The Supreme Court in Indonesia has ruled that price ranges laid by the Indonesian government in July on digital ride-hailing services are prohibited and illegal, mentioning that they hinder competition. The transportation minister of the Southeast Asian nation, on Tuesday- August 22, 2017, launched least and highest tariffs for established ride-hailing companies like Southeast Asia’s Grab, Indonesia’s GO-JEK, and Uber Technologies from July 1, 2017.

The Southeast Asian nation’s transport ministry introduced minimum and maximum tariffs for ride-hailing firms such as Uber Technologies, Indonesia’s GO-JEK and Southeast Asia’s Grab from July 1, 2017. The government cited a requirement to match equivalent pricing with conventional ride providing services and address issues related to undercutting. Drivers working for PT Express Transindo Utama Tbk and PT Blue Bird Tbk taxis in Indonesia had demanded for a ban on all ride-hailing services, appealing that they had to bear with less severe public transport needs compared to the conventional taxis.

But when a team of individuals from Indonesia filed a petition, the Supreme Court responded to it by ordering the government to scrap of the tariff arrays. The Supreme Court declared it in a ruling published on its official website.  Mentioning its augmented tariffs for customers, the ruling stated that, “the lower and upper tariff limitations do not offer vigorous business competition.”

The ruling has withdrawn over a dozen of clauses that were mentioned in the public transportation ministry regulation released recently. It also includes the need for all public transport vehicles to be lawfully registered to firms, compulsory regional quotas for all ride-hailing vehicles, and a limitation to where a “special hire” cars are permitted to operate. Budi Karya Sumadi, the Transportation Minister of Indonesia said that his office is currently studying the rules and would actively abide by the conclusion seeking to prevent any kind of “unrest” in this sector.

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