Presidential Regulation 27/2026: A Legal Stopgap, Not a Solution for Online Drivers
The issuance of Presidential Regulation Number 27 of 2026 on the Protection of Online Transport Workers marks a new chapter in regulating the relationship between digital transport application companies and online motorcycle taxi (Ojol) drivers in Indonesia. Instead of changing the status of Ojol drivers to permanent employees as demanded by various labour unions, the government chose a middle path by strengthening the status of Ojol drivers as micro-entrepreneurs within a partnership scheme, accompanied by new obligations for application companies, including a cap on income deductions at a maximum of eight per cent and basic social security.
This article critically analyses the extent to which Perpres 27/2026 can provide legal certainty for Ojol drivers by examining its consistency with the employment relationship doctrine in the Manpower Law, its position in the hierarchy of laws and regulations, and its implications for the socio-economic protection of drivers. This study concludes that Perpres 27/2026 is a significant step forward but is temporary and legally vulnerable, necessitating a statutory-level regulation to guarantee more permanent legal certainty for gig economy workers in Indonesia.
The application-based transport sector has become a crucial pillar of Indonesia’s informal economy over the past decade. Data from the Central Statistics Agency (BPS) recorded a surge in the number of sole self-employed workers from around 20 million people in 2014 to 31.5 million in 2024, while the number of online transport application partner drivers increased by more than 933,000 people during the 2019–2024 period. Ironically, this quantitative growth was not accompanied by improved welfare; the average income of drivers actually decreased from IDR 3,067,268 in 2019 to IDR 2,634,135 in 2024. This phenomenon reveals a fundamental paradox: the greater the role of Ojol drivers in supporting urban mobility and logistics, the more vulnerable their position becomes within the legal and economic structure that governs them.
Historically, the relationship between drivers and application companies has been formalised through partnership agreements subject to civil law, not labour law. Consequently, Ojol drivers do not receive normative rights such as a minimum wage, employer-covered social security, holiday allowances, paid leave, or protection against termination of employment. Demands from several labour unions, including the Indonesian Transport Workers Union (SPAI), to change the status of Ojol drivers to permanent employees as stipulated in Law Number 13 of 2003 on Manpower have continued to surface, even marked by protest actions involving thousands of drivers. On the other hand, a change in status to a full employment relationship is feared to drastically alter the operational cost structure of digital platforms and potentially reduce the work flexibility that has been the profession’s main appeal.
Amidst this tug-of-war of interests, President Prabowo Subianto signed Presidential Regulation Number 27 of 2026 on the Protection of Online Transport Workers on International Workers’ Day, 1 May 2026. Rather than establishing an employment relationship status, this Perpres took a middle path by affirming the position of Ojol drivers as micro-entrepreneurs within a partnership scheme, while introducing several new protection instruments. The fundamental question this scientific opinion article seeks to answer is whether the strengthened partnership approach under Perpres 27/2026 can truly provide legal certainty for Ojol drivers, or whether this policy merely perpetuates the legal ambiguity that has been the root of the problem.
To understand this issue clearly, it is necessary to trace how Indonesian law distinguishes an employment relationship from a partnership. Article 1, point 15 of Law Number 13 of 2003 on Manpower affirms that an employment relationship arises if three cumulative elements are met: the existence of work, wages, and orders. The absence of one element, particularly the element of orders reflecting subordination, doctrinally places the relationship outside the scope of labour law. Conversely, the partnership relationship between Ojol drivers and application companies has been constructed as a service agreement within the realm of civil law, referring to Article 1601 of the Civil Code concerning contracts for work. In this construction, the application company is not considered to employ the driver but rather provides a digital platform as a means for the driver to run an independent transportation service business. The juridical consequence is significant: Ojol drivers are categorised as Non-Wage Earners in the social security system, so the obligation to register and pay BPJS Kesehatan and BPJS Ketenagakerjaan contributions is borne independently by the driver, not covered by the company as is customary in an employment relationship.
The problem is that the operational reality of Ojol drivers shows strong indications of the existence of the element of ‘orders’ in a modern form, namely algorithmic control. Drivers are subject to operational standards unilaterally set by the platform, ranging from fare determination, performance assessments based on ratings, operational area restrictions, to sanctions in the form of account suspension if certain targets are not met. This situation is what some academics refer to as a form of control resembling an employment relationship, although formally wrapped in partnership terminology. The imbalance in bargaining power between the application company and individual drivers further strengthens the argument that labour law, which was born precisely to correct the inequality of relations between employers and workers, should also cover this phenomenon.