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The government of West Java Province, in this case, the Transportation Office of West Java Province (Dishub Jabar) signed a mutual agreement with the West Java Forum of Alliance for Transportation Aspirations (WAAT) in the form of a mutual statement dated 6 October 2017. The agreement between Dishub Jabar and WAAT among others states to ban the operation of land transportation modes run via information technology-based applications, also known as online- based transport until there is a clear regulation on this type of transportation.

The absence of clear regulations on online transport is the basis for such ban of transport operation in West Java region. Such legal void can cause disruption to national security and order (kamtibmas), so Dishub Jabar needs to temporarily suspend the operation of online-based transport, pending clear regulation on this matter.

The operation of online-based transport was regulated for the
first time under Transportation Minister regulation Number 32 of 2016 regarding Non-route Public Transportation Services (“MR 32/2016”). MR 32/2016 was then amended through Transportation Minister regulation Number 26 of 2017 regarding Non-route Public Transportation Services (“MR 26/2017”). In this matter, Mr 26/2017 regulates with greater detail, the online-based transport which is referred to in this regulation as a “special rental transport”. On 20 June 2017, the Supreme Court through its decision number 37P/HUM/2017 (“Supreme Court Decision”) revokes several provisions in MR 26/2017 which regulates the upper and lower threshold pricing for online- based transport; obligation to have complete legal vehicle documents such as vehicle ownership certificate under legal entity name and vehicle roadworthiness license; obligation to have at least 5 (five) vehicles to obtain commercial transportation service permit; as well as obligation to attach type testing registration certification (SrUT) to obtain commercial transportation service permit.

The regulation also revoked the prohibition for information technology-based application service providers (“application providers”) to act as public transportation service providers in activities such as (i) setting tariffs and providing promotional tariffs below the lower threshold pricing determined, (ii) recruiting drivers, (iii) providing application access to individuals as transportation service providers, and (iv) providing application access to public transportation service providers which have not acquired the license for non-route commercial public transportation services.

Revocation of several points in Transportation Minister Regulation 26/2017 by virtue of the Supreme Court Decision has created a void of law which regulates the operations of online-based transport. To the date of writing of this article, Transportation Minister regulation Number 108 of 2017 regarding Non-route
Public Transportation Services (“MR 108/2017”) has been promulgated. Mr 2018/2017 was the government’s answer to the post-Supreme Court Decision legal void of a regulation which governs the operations of online-based transport.

The writer is of the opinion that with the Mr 108/2017 promulgated, the regulation is expected to become a legal umbrella for online-based transport that will enable them to operate in West Java region. Therefore, the business of rental transportation in West Java would be prevented from monopolistic practices and a healthy climate of business competition in rental transport will be created in West Java.