Jakarta. The new smartphone-based transportation client Uber is all about making things easy for its customers. Too easy, perhaps, given the ease with which the app was used to call in five cars, only to have the drivers detained by the Jakarta Police.
The police had been tipped off by the Jakarta chapter of Organda, the Organization of Land Transport Operators, whose quarrel with Uber is that it doesn’t have a license to operate a transportation business in Indonesia.
So Organda took matters into its own hands, calling in eight cars (three failed to show up) and delivering the drivers into the hands of the police, who questioned them for several hours before releasing them.
The recent kerfuffle between Uber and the authorities points to a wider divide between new transportation services and regulation.
Alongside Uber, GrabTaxi and Go-Jek are companies that have seized Indonesia’s smartphone revolution to offer new modes of transport.
But these newcomers face challenges from a regulatory system that still isn’t sure whether to consider the app-based companies as legitimate enterprises or interlopers.
The issue isn’t unique to Indonesia. Wherever Uber goes, it attracts controversy. As France waits for a court decision regarding Uber’s legality, more than 2,000 Paris taxi drivers have joined in an occasionally violent strike that has slowed traffic to a halt.
In Indonesia, the dispute stems from disagreement as to what service Uber actually provides. In the eyes of the government, as well as associations of competitors like Organda, Uber is a transportation service like any other.
Save for its unique method of hailing its cars, they argue, Uber operates like a normal car service. As such, they contend, it should be required to obtain the same licenses and pay the same taxes as other companies.
But Uber argues that this perspective is based on a misunderstanding. It is not a car service, but an app that connects users to locally contracted drivers, it points out; it doesn’t hire drivers directly and it’s not involved in the rides themselves.
The government remains unconvinced. “They are stealing money in my area,” Jakarta Governor Basuki Tjahaja Purnama said in the wake of the Organda sting.
“If [Uber] had wanted to meet me from the beginning, then I would have done it. But now, if they wish to have a meeting with me, they must establish a company [in the country].”
Yoga Adiwinarto, director of the Indonesian office of the Institute for Transportation and Development Policy, an NGO that advocates for sustainable transportation worldwide, sees a larger issue at play.
Whenever a transportation service becomes formalized, he explains, lawmakers try to fit the new service into a regulatory framework that might not fit.
“The regulation can’t keep up with the demand or the technology,” he tells the Jakarta Globe.
But until the service comes to the forefront, it’s left to its own devices.
Yoga believes that Go-Jek has experienced similar problems to Uber.
“Go-Jek, what it does, is formalize the ojek,” or motorcycle taxi driver. “It makes the ojek driver registered. And it makes it a more efficient operation so their income is also higher,” Yoga says.
But when Go-Jek started up, regulators came down hard on it.
“The problem is that once it became formalized, the government decided that it had to fit with the regulation,” Yoga says.
“If you are taking passengers, you have to have a yellow license plate. But there is no way that the motorcycles have the plates.”
Uber today faces the same problem, Yoga says.
“Uber uses [existing] car rental companies. Right now there are so many [private] black[-plate] cars which pick up passengers. But the government ignores the existence of these vehicles. Once Uber came, they started to make a big deal out of it,” he says.
Alan Jiang, general manager for Uber in Jakarta, echoes Yoga’s sentiment.
He told the Globe that his company “want[s] to make Uber the default transport option to get around town.” But the current regulatory climate makes that difficult.
“In a lot of the cities and countries we go into, there isn’t necessarily any regulatory framework that governs this kind of space,” Jiang says.
But by working with the government, Jiang believes that an agreement may be reached.
He points to the success Uber has had in the Philippines, where traffic conditions are similar to those found in Indonesia.
“We worked closely with the Philippines government and they just released some regulation that governs [peer-to-peer] ride-sharing,” Jiang says.
“Our goal is to establish a regulatory framework which benefits riders and drivers as much as possible,” he adds.
His work seems to be cut out for him in Indonesia. Having made an opponent of Governor Basuki and the local competition, Uber now finds itself in a tough spot.
Yet despite the legal difficulties, Jiang says that Uber’s operations in Indonesia are booming.
“Our biggest week in 2015 was 10 times bigger than our biggest week in 2014,” he says.
He hopes to make Uber “as reliable as running water.”
“Every time you open the Uber app, you can always see a car and that car will always get you quickly and reliably where you need to go.”
Yoga agrees that new transportation apps are here to stay.
“This is only the beginning. I can see lots of new innovation, particularly with smartphone technology. The fact that regulation cannot keep up with technology doesn’t mean that it’s a bad innovation,” he says.
In the end, Yoga believes the regulatory framework will have to be expanded.
“If they cannot find a way to make this included in the regulation, I think we’ll be going backward,” he says.
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