Mon, 20 Jul 2015

JAKARTA: Manoeuvring through rush hour traffic in a city which has some of the world's worst traffic jams is a challenge for millions of residents living in Jakarta.

So companies offering transport services to the public via smartphone applications are a welcome alternative.

Residents can now order a motorcycle taxi known as 'ojek' from their home or office via the home-grown app GO-JEK or through Grab Bike, recently set up in Jakarta.

Demand for their services are said to be booming, with one company claiming it has seen 500,000 bookings in the six weeks since it began operations.

However, the service these companies provide falls into a grey area in existing regulations for public transport as motorcycles are considered private vehicles. As such, they are not meant to be providing a taxi service for the public.

“Two-wheelers are not included in the Number 35 Transport Ministry decree because traffic laws cite minimum service standards,” said Berman Limbong, head of the legal department of the Organisation of Land Transport Operators.

“Some of the factors are passenger safety and security. There are no safety guarantees on motorbikes. Laws regulate that companies must be held responsible for the safety of their passengers.”

The Jakarta Transportation Council - Jakarta's transport watchdog - says it is illegal for motorcycle taxis to transport people around, and that they're only allowed to provide courier services.

But GO-JEK believes motorcycle taxis serve a real need to the public and are looking forward to new rules for the industry.

"I don't think that the whole legal argument is a valid one … because it's a genuine market need. It's a genuine informal sector,” said GO-JEK founder Nadiem Makarim. “We are very much supportive and are willing to participate in drafting legislation and to actually bring these guys into the formal framework."

In response to the growing demand for legal certainty, legislators plan to deliberate on a Transportation System Bill which will regulate ojeks and app-based transportation companies. They will likely establish a special commission involving legislators responsible for issues on transportation, IT and Trade.

“We are aware that this new trend has to be regulated because it has become a concern for traditional transport vehicle operators,” said Michael Wattimena, a legislator. “In addition, we must look into consumers’ protection particularly their comfort and safety.”

Recently, the Philippines became the first country to regulate specifically for app-based car-hailing services. It is a move Grab Bike hopes can happen in Indonesia, for services provided by transport apps.

“That is the kind of partnership we wish to strike with the government and making sure that whatever model that we are projecting in that particular market really fits and helping everyone, be it GrabBike drivers or Grabtaxi drivers.”

Legislators say it will take months before they can start deliberations. In the meantime, motorcycle taxis provided by GO-JEK and Grab Bike continue to operate despite their illegal status.