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Ride-hailing startups in Indonesia, this is the answer you’ve been waiting for

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According to the Ministry of Cooperatives and SMEs, ride-hailing startups may use privately owned cars under this one particular condition

On Monday, driver-partners from various ride-hailing startups operating in Indonesia marched to protest against Ministry of Transportation Regulation No. 32 year 2016, which obliges ride-hailing startups to perform road worthiness test and have vehicles being listed as the company’s property.

Today, the Ministry of Cooperatives and Small and Medium Enterprises (SMEs) announced the result of a meeting on Tuesday between the Ministry, Minister of Communications and Informatics Rudiantara, Directorate General of Land Transportation Pudji Hartanto Iskandar, and several ride-hailing startups.

“The principle of cooperatives firmly stated users [of assets] as owners, and owners as users. Therefore, owners of online taxi enlisted in the cooperatives are considered the owner of the cooperatives, not an employee of the cooperatives,” said Agus Muharram, Secretary of the Ministry of Cooperatives and SMEs, who was also present in the meeting.

“Assets owned by members of the cooperatives are used as a mean of production, and are not transferred into assets owned by the company. It’s different with conventional taxi drivers, who are employees working in a company,” he further explained as reported by Kompas Tekno.

“If the taxi was a privately owned cars owned by members of the cooperatives, then it has to remain listed as a private property,” he added.

Also Read: Now that Ignasius Jonan is out, what does the future hold for Indonesian ride-hailing startups?

First step towards legalisation?

This may come out as a good news for ride-hailing startups operating in Indonesia, which have been facing battle with government regulation in the past year.

The Indonesian government through the Ministry of Transportation even once managed to ban ride-hailing startups for 24 hours before President Joko Widodo intervened.

The formation of a driver-partner cooperative, consists of driver-partners from various ride-hailing startups, has been perceived as a win-win solution for the issue.

Today’s announcement by the Ministry of Cooperatives and SMEs means that ride-hailing startups will be able to continue operating as per status quo, with car owners not being obliged to change the cars’ ownership status.

It remains to be seen whether this will be the final solution, or whether the government (and ride-hailing startups) will take further steps to acknowledge and legalise the service.

Image Credit: Timothée Mägli on Unsplash

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