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Indonesia: Court Overturns Regulation on Car-Hailing Services

(Aug. 31, 2017) Following a June 2017 hearing, Indonesia’s Supreme Court announced that a government regulation on ride-hailing services contradicts the country’s laws. As a result, the Court annulled 15 articles of the regulation, including provisions on company logos on the cars, minimum and maximum fare limits, registration of vehicles under company names rather than those of individuals, areas in which the services could operate, and the size of the services’ fleets.  The regulation had been in effect since April 2017.  (Supreme Court Overrules Car-Hailing Service Regulation, JAKARTA GLOBE (last visited Aug. 23, 2017); Constance Johnson, Indonesia: Limit on App-Based Cabs in Jakarta, GLOBAL LEGAL MONITOR (Mar. 31, 2017).)

The laws cited by the Court are the 2008 Law on Micro, Small, and Medium Enterprises and the 2009 Law on Road Traffic and Transportation. (Law of the Republic of Indonesia Number 20 Year 2008 Regarding Micro, Small, and Medium Enterprises (July 4, 2008), KPPU [Commission for the Supervision of Business Competition] website; Law of the Republic of Indonesia Number 22 Year 2009, Concerning Road Traffic and Transportation (June 22, 2009), SCRIBD.)

According to the Ministry of Transportation, the regulation was designed to accommodate ride services, including GoJek, Grab, and Uber. Four drivers appealed the regulation to the Supreme Court, who argued that the rules cut into their incomes and favored regular taxis over the ride-hailing services.  (Supreme Court Overrules Car-Hailing Service Regulation, supra.)

On August 21, Budi Karya Sumadi, the Minister of Transportation, stated that the Ministry would study the Court decision and redraft the regulation in the next three months. The head of communications and public information at the Ministry of Transportation, Hengki Angkasawan, stated the next day that the Ministry “will comply with the laws and regulations, including those of the Supreme Court. … Next we will coordinate with all parties for the best arrangement that can give equal space to all transport operators, especially with regards to road transportation.” (Id.)