Mon, 23 Nov 2015

Smartphone-based ride-hailing application Uber is planning to start a company in Indonesia, in the form of a foreign investment firm, an executive has said.

Uber's spokesperson in Indonesia, Karun Arya, said Uber had not yet set up its corporation in Indonesia. The application's business activities in Indonesia were still coordinated through its Southeast Asia branch office, he said.

Karun confirmed that Uber's plan to open its corporation in Indonesia was ongoing and it was expected that the process would be completed in the beginning of next year.

"We have submitted a corporation permit request to the Coordinating Investment Agency's [BKPM] foreign investment division. The company will be officially established around the end of this year or in the beginning of 2016. Everything is still in process," said Karun as quoted by on Friday.

The San Fransisco-based transportation application has been operating in Indonesia for one year. It has continued to face serious challenges, particularly from the Jakarta administration, concerning the fact that it is a technology business company, not a transportation provider.

Uber is carrying out its business activities through its Southeast Asia representative office, which supervises its activities in several areas, namely Bali, Bandung (West Java), Bangkok, Ho Chi Minh City, Kuala Lumpur and Melbourne.

Speaking about Uber's business activities in Indonesia, especially in Bali, Bandung and Greater Jakarta, Karun said he had communicated with all stakeholders, including the regional heads in those areas.

Karun asserted he had gone to meet Jakarta Governor Basuki "Ahok" Tjahaja Purnama and officials of related agencies to discuss the presence of Uber in Jakarta several times.

"We have met with Governor Ahok and all parties have given their positive responses to innovations from Uber," said Karun.

Until today, he said, Indonesia has not yet issued regulations that fully manage the operations of mobile application industries, such as Uber, in the country.

He was certain that the Indonesian government would be attracted to work with Uber in developing regulations to manage technology-based businesses, as had been carried out by governments in other countries.

Karun further explained that Uber had not yet taken advantage of every transaction it had made since it began to operate in Indonesia last year.

All fees paid by consumers went to drivers or rental car owners who partnered with Uber, he added.

"Up to now, we have not yet received money. We didn't take any portion of the revenues obtained. All of it went to drivers, but we will regulate a profit-sharing mechanism in the future, in which 80 per cent of the revenues will go to the drivers while the remaining 20 per cent will be for us," said Karun.

He said Uber's decision to not yet take any profits from its business activities in Indonesia was due to the absence of a clear regulation on mobile application businesses.