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Ministry bans ride-hailing 'ojek' services from offering 'excessive' discounts

Jakarta Post - July 4, 2019

Jakarta – The Transportation Ministry has prohibited ride-hailing transportation companies from offering promotional discounts for its ojek (motorcycle taxi) services that exceeded the price ceiling stipulated in the relevant ministerial decree.

"The ban is [intended] to maintain business sustainability and healthy business competition," the ministry's land transportation director general Budi Setiyadi stated in a circular issued on Wednesday.

He said that the "too high" promotional discounts that were continuously being offered to users could kill off competing companies and result in unhealthy competition. The ministry would be taking a tough stance against violators of the latest circular and report them to the Business Competition Supervisory Commission (KPPU) for investigation.

Budi said that the circular was also issued in response to rumors that the ministry was prohibiting ride-hailing companies from offering any promotional discounts. He underlined that such promotions were still allowed, as long as the discounts did not exceed the price ceiling.

Transportation Ministerial Decree No. KP 348 regulates ride-hailing ojek fares and includes a guideline for calculating the fares, as well as stipulates the price ceiling and floor ceiling for the service. (bbn)

Source: https://www.thejakartapost.com/news/2019/07/04/ministry-bans-ride-hailing-ojek-services-from-offering-excessive-discounts.html