December 18, 2015 / 5:08 AM / in 2 years

Indonesian president rebukes minister over ride-hailing crackdown

JAKARTA (Reuters) - Indonesia’s president publicly rebuked one of his cabinet ministers on Friday for a clampdown on ride-hailing services such as Uber and Go-Jek, which triggered outrage on social media in a country where public transport options are limited.

Indonesia's Minister of Transport Ignasius Jonan speaks about the missing Trigana Air flight during a news briefing in Jakarta, Indonesia, August 16, 2015, in this photo taken by Antara Foto. REUTERS/Sigid Kurniawan/Antara Foto/Files

Transport Minister Ignasius Jonan’s restriction, which sent shares of taxi companies soaring in morning trade, will be seen as another embarrassment for President Joko Widodo, who has struggled to keep cabinet members in line since he took office last year.

Just months ago he invited dozens of motorbike drivers employed by Go-Jek, whose lime-green colors are now ubiquitous in the traffic-clogged streets of Jakarta, to lunch at his palace. (bit.ly/1Oc4H5K0)

“Don’t let the people be burdened because of regulations,” Widodo said on his official Twitter account, adding that regulations “need to be managed” and he would “immediately” summon Jonan for talks.

Innovation by the younger generation should not be restrained and applications such as Go-Jek exist because they are needed by society, Widodo told reporters at the palace on Friday.

The Kompas newspaper reported on its website late on Thursday that Jonan’s ministry had banned the use of personal vehicles for public transport.

The minister rowed back on Friday, saying in a statement that online ride-hailing services could continue to operate until a solution to meet public transport needs is found. He gave no further details.

This episode shows that Widodo is “unable to fully control his ministers,” Firman Noor, a political analyst at the Indonesian Institute of Sciences, told Reuters by telephone.

“There seems to be relative independence at the ministries to make their own internal decisions that may not be communicated to the president,” Noor said. “In some cases they contradict the president’s stand.”

Jonan is no stranger to controversy. This year the transport minister introduced a “positive equity rule” for airlines that compelled carriers, including the Indonesia affiliate of AirAsia Bhd, to bulk up on equity.

Shares of Indonesian taxi operators PT Express Transindo Utama Tbk and PT Blue Bird Tbk surged as much 33 percent and 16.4 percent, respectively, on Friday after the reported ban.

They pared gains by afternoon, however, when Express stood 5.5 percent higher, and Blue Bird was up 2.1 percent.

The attempt to cripple ride-hailing services provoked an online outcry: within hours #SaveGojek was the top trending topic on Twitter in Indonesia.

“Thanks to President @Jokowi for his support to 200 thousand Go-Jek drivers and 8 million of our application users,” Go-Jek founder Nadiem Makarim said on Twitter.

College student Damianus Andreas said the transport ministry was “reckless” in its ban attempt, adding that the government should be more flexible in dealing with new inventions.

As the furor grew, Transport Ministry spokesman J. A. Barata told a briefing the government would be a laughing stock if it was legal for dangerous vehicles to carry the public.

“People will laugh at us,” he said.

GrabTaxi, another online rides service, said it respected regulations and was taking steps to improve safety for passengers, but was in any case not even a transport operator.

“GrabCar and GrabBike are technology partners to licensed transportation companies, and do not own any vehicles nor is a transport operator,” a spokeswoman said in an email.

Additional reporting by Gayatri Suroyo, Fransiska Nangoy and Jakarta newsroom; Editing by John Chalmers and Clarence Fernandez

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