Grab Indonesia and Gojek Indonesia drivers went on a series of strikes from the beginning of this month to demand fare raises. (Antara Photo/Aditya Pradana Putra)

Gov't Considers Fare Raises for Grab, Gojek to Help Drivers Cope With Rising Living Costs

BY :THRESA SANDRA DESFIKA & FERIAWAN HIDAYAT

JANUARY 21, 2020

Jakarta. The government is considering a plan to increase the price floor for online motorcycle ride-hailing services as their "driver-partners" – worried by a premium raise in the national healthcare insurance, a growing number of competitors and rising living costs –continue to demand fare raises.   

The Transportation Ministry regulates the price floor for ride-hailing services to prevent predatory pricing. It also sets a price ceiling to stop customers being ripped off during peak hours.   

The price cap, however, also determines the size of the drivers' take-home pay, which has effectively shrunk as they now need to pay twice as much as last year for the national health insurance (BPJS Kesehatan) premium.

Some drivers – of around 2.5 million drivers across the country – went on a series of strikes from the beginning of this month to demand fare raises. 

They pointed out the government had already increased the regional minimum wages an average of 8.5 percent this year to cope with the rising costs of living.

The drivers demanded that ride-hailing fares should be adjusted at about the same rate as well.  

Ahmad Yani, the director of road transportation at the Transportation Ministry, said the government had listened to the demand and already met with driver representatives and executives from Grab Indonesia and Gojek Indonesia to discuss the fare raises. 

They are scheduled to meet again on Wednesday. 

"Some fare components have gone up, but some have also gone down. We have to simulate the changes in front of all the driver-partners to see," Ahmad said on Tuesday.

These components include vehicle depreciation, loan interest, Grab or Gojek fees, vehicle insurance, taxes and fuel, Ahmad said. 

He said the cost component simulation may result in a fare increase, no change at all or even a fare cut.

The Indonesian Consumer Protection Foundation (YLKI) will also have a say the discussion about the fares, Ahmad said. "How much the public are willing to pay for ride-hailing services will greatly influence the decision on the fares," he said. 

The ministry is also open to the possibility it might be better for the provinces to determine the fares independently, according to Ahmad.   

The drivers have also asked the ministry to evaluate their partnership scheme with online ride-hailing service providers, in particular to determine if they work as an independent partner for the companies, or as a worker.

They also demand that ride-hailing companies should cap the number of their drivers because older drivers have seen their income plummet in the face of competition from new drivers.   

Tirza R. Munusamy, the deputy head of public affairs at Grab Indonesia, said in a statement that Grab is committed to working hand-in-hand with the government and its driver-partners to solve the issue.  

"As a business entity operating in Indonesia, Grab always respects and complies with applicable government regulations regarding fares and security benchmarks," Tirza said. 

In its driver-partner recruitment process, Grab conducts periodic evaluations to ensure there is enough demand for the size of its fleet. "This is important to ensure our driver-partners in every region can earn a good income, and customers can order a GrabBike ride whenever they need one," Tirza said. 

 

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