President Prabowo Subianto announced the regulation on Labor Day, 1/5. He signed the new rule, which tightens the commission cap for ride-hailing platforms such as Indonesia's GoTo and Singapore-headquartered Grab.

These two platforms currently impose a 20% commission on drivers. This means that for every 100,000 IDR ride, drivers only take home 80,000 IDR. Under the new regulation, they will receive 92,000 IDR.

"Platform commissions must be under 10%. Drivers are the ones sweating, but the platforms are the ones receiving the money. Sorry, but that's not acceptable," Prabowo stated before tens of thousands of workers at the National Monument square.

A Grab driver operates during rush hour in Jakarta, Indonesia, 18/7/2016. Photo: Reuters

Beyond lowering the commission cap, ride-hailing companies must also provide accident and health insurance. The president added that if platforms do not comply with the regulations, "they should not do business in Indonesia".

This represents a sharp reduction from the maximum 20% fee currently applied by Gojek and Grab, Indonesia's two largest ride-hailing platforms. However, Prabowo did not specify when the regulation will take effect.

The announcement follows growing complaints from the gig driver community to Parliament. For years, drivers and unions have staged periodic protests in major cities, demanding lower platform fees, better working conditions, and formal recognition as laborers to access state benefits.

Renaldi Satriansyah, a 25-year-old gig driver, expressed delight at the prospect of receiving 92% of his revenue. For the past 5 years, he has regularly navigated Jakarta's congested roads with passengers, yet one-fifth of his earnings went to the platform.

Muhammad Surya Wirawan, a 37-year-old driver, reported that his daily 12-hour shifts now yield significantly less income since the Covid-19 pandemic. Previously, his earnings left a small surplus, but now they barely cover daily living expenses for his family of three young children.

Trubus Rahardiansyah, a public policy analyst, stated that the government's pro-driver stance, aimed at appeasing growing dissatisfaction, is understandable. However, he warned that operators must find a balance to ensure businesses can still generate profits.

"Investors do business for profit. If profits are insufficient, they will withdraw, leading to job losses for drivers," he added.

Meanwhile, the chief executive officers of GoTo and Grab in Indonesia stated they would comply with the government's regulation, committing to benefit both driver partners and consumers.

Bao Bao (according to The StraitsTimes, Reuters)