Legal Updates for April 2017

Amid Continuing Controversy, Minister Revisits Online Taxi Issue with New Regulation

Minister of Transportation Regulation No. PM 32 of 2016 on Unscheduled Public Transportation Services ("MOTR 32/2016"),issued on 1 April 2016 and came into force on 1 October 2016, clearly failed to resolve the tension between conventional taxi providers and the providers of app-based, online taxis. On one hand, conventional taxi providers argued that MOTR 32/2016 effectively legalized the operation of online taxis, while on the other hand, the online taxi providers complained that the regulation adversely affected their business model through such things as the requirement that their vehicles have a minimum of 1,300 cc and that they provide car pool facilities. These requirements, they argued, were akin to those applicable to conventional taxi providers. The intense competition to attract customers continued and even led to violence in several areas.

The Minister of Transportation has responded to the deficiencies inherent in MOTR 32/2016 by revoking and replacing it with Regulation No. PM 26 of 2017 on Unscheduled Public Transportation Services ("MOTR 26/2017"). MOTR 26/2017 was issued on 31 March 2017. The Minister presumably believes that MOTR 26/2017 is more accommodating to the demands of both parties.