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To find out the appropriate law to this kind of business, we should separate the Online Portal Provider (“OPP”) and the Transportation Provider (“TP”). The OPP is Gojek or Uber management, and the transportation provider is the cars’ owners and their drivers.

Several time ago, we were shocked by massive demonstration performed by taxi drivers. They protested and asked Indonesian Government to take a proper action on the outbreak online transportation application provider which were deemed threating the conventional transportation’s business. For some people, the demonstration might be seem as an unpleasant and inappropriate behavior, it may be right, however in my opinion this action also shown our society’s awareness on legal aspect, especially transportation law. This can be seen from conventional transportation provider’s request to the government to issue a regulation for business application for transportation service.

Actually, before the massive demonstration happened, the Indonesian Government through Transportation Ministry already released a regulation to temporarily stop the online transportation service in Indonesia until the Transportation Ministry conducts a coordination with other ministry to tackle this issue. However, the regulation was protested by most Indonesian people and finally the regulation was revised by Transportation Ministry on the same day of the regulation release. That action finally led to the massive demonstration as mentioned-above. The presence of the online service has caused concern among public transportation companies and harmed the livelihood of drivers working for non-online transportation services.

Having showed that phenomenon, we can see that core problem is, the Indonesian Government is not yet sure how to regulate the business application for transportation service and what law that must be used to regulate the business. This finally leads to sharpened conflict between the players in transportation industry (read: the role of Government in regulating technology services application). Therefore in this article, we will find out legal basis for online transportation business.

The Online Transportation Services

The Application-based (Online) Transportation service Provider provides easier access to transportation for the consumers comparing to conventional provider, for instance: simple payment access, security access (because the driver is registered), and so forth.  Therefore, most of people decide to use Online Transportation Provider service. To find out the appropriate law to this kind of business, we should separate the Online Portal Provider (“OPP”) and the Transportation Provider (“TP”). The OPP is Gojek or Uber management, and the transportation provider is the cars’ owners and their drivers.

As an OPPs, do Gojek and Uber must secure transportation business license? The answer is NO. Why? Because the OPPs just act as the intermediary between the TP and the customers.  For illustration is in Agoda and Traveloka cases, both of those providers do not have Tourism Registration Business (Tanda Daftar Usaha Pariwisata/TDUP), however the hotels registered or showed on those website must obtain the TDUP. Therefore the TP is obliged to apply for the transportation license.

However, as a company, the OPPs must fulfill the requirements to run business as business entity, for example, if in running its business the OPP get capital injection from non Indonesian individual or entity, then the OPP requires to get license from the Indonesian Investment Coordinating Board (the BKPM). Furthermore, for the online portal license itself, until now there is no specific license that needs to be obtained.

 (Public) Transportation Provider

As mentioned above, the TP must obtain transportation license as required by Law No. 22 of 2009 on Road Traffic and Transportation and Government Regulation No. 74 of 2014 on Public Transportation. Both regulation state that Public Transportation companies are obliged to meet the minimum service standards that include security, safety, comfort, affordability, equity and regularity, which are set based on the type of service provided.

Unfortunately, the TPs (ojek and car similar to taxi) which work with Gojek and Uber’s services did not fulfill the provisions of Road Traffic-Transportation Law and Public Transportation Law.  Based on Indonesian Government survey, the TPs using OPP’s service were not fulfilled the following requirements: a) In a form of legal entity (Limited Liability Company or Cooperative), b) having pool or garage for the car, 3) pass KUER test, 4) Having General Trade License (SIUP), Company Registration Certificate (TDP), Nuisance Pemit (HO) and; 4) public transportation must be at least a three-wheeled (Ojek/motorcycle can not be classified as public transportation).

For summary, to avoid any unwanted business interruption on the implementation of “sharing economy” business model, anyone who involved in this industry must pay attention to the regulation on their respective services. You must re-check what license that must be obtained and ensure that the license will fit to your business model.  If the law silent or the business is in a grey area, find the closest basic regulation which can be the legal basis for the respective business models.

Bimo Prasetio and Fairus Harris


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