Indonesia’s Transport Ban Shows President’s Inability to Control Ministers

Indriaty Octarina was enraged when she found out that her favorite mode of transport, the popular Uber-style motorcycle taxi service Go-Jek, was temporarily declared illegal by Indonesian transport minister Ignasius Jonan last week until President Joko Widodo was forced to step in and countermand the order.

As a worker who must go through the traffic hell from her home to office located in the Jakarta Stock Exchange building in South Jakarta every day, the news struck her like a thunderbolt, she said.

“I use Go-Jek every day because it is faster and cheaper to go anywhere with it. Taxi fare is just too expensive, and public transportation is just not safe or comfortable. What should we do now?” she asked Asia Sentinel.

Shock for Commuters

The news that Jonan had announced a ban on app-based transportation in any form – including Go-Jek, Grabbike and Uber – shocked not only Indriaty but most of the Indonesian public. Although the minister indicated that the ban had legal standing, nobody could understand why a ban was suddenly put in place on ojeks, or private motorcycles being used as public transportation, after millions of people, especially those in big cities, have used them for years.

But the new app-based transport, especially Go-Jek, with its vetted and uniformed operators, who are trained to be polite, is cutting dramatically into traditional taxi and motorcycle services – and even hitting major transportation firms including those whose transport segments run from taxis to containers to buses to heavy equipment in big cities across the country. It is these groups that are suspected of being behind the ban. And it illustrates the trouble that Jokowi has in keeping the traditional power structure exemplified by many of his ministers in line.

“Calling on the National Police and regional governments to enforce the law on public transportation, under which the massively popular vehicle-hailing services like Uber and Go-Jek strictly speaking are illegal,” Jonan’s directive to the police said in announcing the ban.

Quick reversal

In this case, the popularity of the app-based services won out in dramatic fashion. Users and supporters vented their anger through social media and within hours the uproar had become so loud that Jokowi had to intervene. Five hours after Jonan announced the ban, the president reversed it.

"I called Jonang and told him, 'This is going to start a revolution. Do you want hundreds of thousands of ojek drivers at your office?'" said a prominent Indonesian businessman. "This was just so stupid. Thank goodness the president sorted it out."

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

Blow to innovation

“Innovation by the younger generation should not be restrained and applications such as Go-Jek exist because they are needed by society,” Jokowi told reporters at the state palace only a few hours after the ban.

“I don’t know what has just happened. Such a strange day,” Indriaty Octarina the Go-Jek user told Asia Sentinel.

Go-Jek's founder and CEO Nadiem Makarim—one of the business people in Jokowi ‘s entourage during his recent visit to the United States – expressed his gratitude, calling it a victory for the democratic process and the people.

“Dear lovely GO-JEK users, President ‘Jokowi’ just answered our prayers by cancelling the Transportation Minister's circular regarding the prohibition of app-based ojek and online taxi services. Thank you very much for your support on social media,” Nadiem wrote in an e-mail sent to Go-jek users, saying that he was touched by the enormous public support.

Nadiem added that the withdrawal also guaranteed the welfare of the families of around 200,000 drivers in several provinces in Indonesia who make a living as Go-Jek operators.

Go-Jek isn’t Alone

Nonetheless, the confusion regarding changes in public policy is not new under the Jokowi administration, with political analysts often saying it shows evidence of lack of coordination and that Joko is "unable to fully control his ministers.”

The most compelling evidence of that is the titanic battle going on between ministers now over the projected renewal of the mining contract for the US-based Freeport McMoRan Indonesia. On a less dramatic level, earlier in January this year, for instance, Manpower Minister Muhammad Hanif Dhakiri announced that the government would require existing and prospective foreign workers to pass Indonesian language tests to be eligible for a work permit, a move seen by many foreign investors as protectionist.

The language proficiency requirement is mentioned in Manpower Minister Regulation No. 12/2013 on procedures for the employment of foreign workers. The regulation stipulates a number of requirements for foreign workers to obtain work permits, including the ability to communicate in Indonesian. However, the regulation excludes commissioners, directors and those in temporary employment.

However the plan was scratched in early March after Korean, Japanese, American and European business chambers objected to the latest manifestation economic nationalism from Indonesia’s establishment.

The plan was regarded as putting barriers in place for foreign investment at the same time the president has repeatedly said he wants to deregulate and speed up the process for obtaining permits to boost investment amid three years of declining pace in economic growth.

The previous coordinating minister for economics Sofyan Djalil told media in April that the business community basically “don’t want and don’t need” this kind of regulatory cleanup, raising more questions whether Joko Widodo is really in charge. It has led to a constant battle on the president’s part to try to keep the deregulation process moving. Go-Jek and its app-based partners are just one of many examples of the difficulty.