Alifa Putri - Writing Sample

app-based motorcycle taxis: neither ban nor ignore

Alifa Putri Master of Urban Planning Candidate Class 2018 Harvard Graduate School of Design

thesis App-based motorcycle taxis have appeared in developing countries much as app-based taxis such as Uber and Lyft appeared in developed countries.

The industry is growing at full tilt because of its ability to provide low-cost transportation service in largely underserviced areas. Yet when it comes to policy, cities around the world tend to limit themselves between banning and ignoring app-based motorcycle taxis. Some countries in Southeast Asia have banned the service, including Malaysia and ÂŹÂŹÂŹThailand, while other has ignored them, as has Indonesia to date.

This case study turns to Jakarta, Indonesia where the debate over regular taxis versus app-based taxis is being replayed with ojek (motorcycle equivalent of unregulated taxis) and Gojek (motorcycle equivalent of app-based taxis like Uber and Lyft). By analyzing the benefits and externalities of app-based motorcycle taxis, this paper argues that the best approach is to create an intermediate position which attempts to retain the benefits while reducing the externalities of app-based motorcycle taxis.

motorcycle in jakarta Like many other cities in developing countries, Greater Case Study Jakarta’s (locally known as Jabodetabek) public Managing the Rise Online Motorcycle transportation system was of never fully built.

The capitalTaxis city in the Greater Indonesia paid price inJakarta, the early 2000s when it began to face Alifa Putri, MUP 2018 of the growing population, income congestion as a result and, inevitably, private vehicle ownership, especially of Like many other cities in developing countries, Greater Jakarta’s (locally known as motorcycle.

Jabodetabek) public transportation system was never fully built. The capital city paid the price in the early 2000s when it began to face congestion as a result of the

Despite the introduction of Bus Rapid Transitprivate in 2004, growing population, income and, inevitably, vehicle ownership, especially of the number of motorcycles in Jakarta alone has increased motorcycle. steadily from 8.7 million in 2010 to 13 million in 2015. introduction of Bus Rapid Transit in 2004, It Despite grows atthe 10% annually—five times faster than the the number of motorcycles in Jakarta alone has increased steadily from 8.7 million in 2010 to 13 million in 2015. It number of buses (BPS Jakarta, 2015). As a result, 75% of grows at 10% annually—five times faster than the number of buses.1 As a result, 75% motorized vehicles in Jakarta are motorcycles. of motorized vehicles in Jakarta are motorcycles.

Table 01.

Motorized Vehicle in Jakarta, 2010-2014 Table 01.Registered Registered Motorized Vehicle in Jakarta, 2010-2014 Type

2010

2011

2012

2013

2014

AnnGrowth

Motorcycle

8,764,130

9,861,451

10,825,973

11,949,280

13,084,372

10.54%

Private car

2,334,883

2,541,351

2,742,414

3,010,403

3,226,009

8.75%

Freight

565,727

581,290

561,918

619,027

673,661

4.46%

Bus

332,779

363,710

358,895

360,223

362,066

2.13%

SpecVehicle Total

-

-

129,113

133,936

137,589

-

11,997,519

13,347,802

14,618,313

16,072,869

17,523,967

9.93%

Source: Badan Pusat Statistik Jakarta, 2015

A small portion of the motorcycle fleet are used as informal motorcycle taxies, locally

A known small portion thedoes motorcycle areroute used nor as do the drivers of these twoas ojek.of Ojek not havefleet a fixed informal motorcycle taxies, locally known asorojek.

Ojek wheeled taxis require a commercial license permit to operate. Ojek drivers gather in anot pangkalan (hub),route mainlynor located residential areas with limited transit options, does have a fixed do theindrivers of these and negotiate therequire cost of atheir service onlicense a trip-by-trip basis. The cost of taking an two-wheeled taxis commercial or permit variesOjek based on thegather trip’s length, traffic conditions toojek operate. drivers in a pangkalan (hub), and time of day. People pay 3-5 times the cost of public transit to take ojek to save time. Such high cost prevents mainly located in residential areas with limited transit people from taking ojeks for longer rides. Instead, they only serve first- and last-mile options, and negotiate the cost of their service on a triptrips to and from a public transit station. by-trip basis. The cost of taking an ojek varies based on

the 1 trip’s length, traffic conditions and time of day. People http://jakarta.bps.go.id/backend/pdf_publikasi/Statistik-Transportasi-DKI-Jakarta-2015.pdf pay 3-5 times the cost of public transit to take ojek to save time. Such high cost prevents people from taking ojeks for longer rides. Instead, they only serve first- and last-mile trips to and from a public transit station.

the rise of online ojek Up until 2010, ojeks had been able to operate without much scrutiny from the government. Their legal status was challenged when online motorcycle ride-hailing companies such as Gojek, GrabBike and UberMotor entered the market and offered a ‘tech-solution’ to make ordering ojek more convenient. Passengers only need to punch in their origin and destination, and the app will match the passenger with the nearest available driver and show the trip’s route, cost and estimated travel time. They no longer have to walk to an ojek hub and negotiate with a driver. In addition, these ride-hailing companies provide passengers with accouterments such as paper face masks, helmets and hair nets (WSJ, 2017). With over 100,000 drivers in uniforms, the ojek industry suddenly became much more prominent on the streets of Jakarta.

For most riders, the biggest draws are the speed and low cost. Motorcycles can breeze through traffic jams.

A trip on an ojek usually takes a fraction of the time needed by public transit or car. As of July 2017, Gojek charges Rp10,000 (76 cents) plus Rp2,500 (20 cents) per kilometer for the first 10 kilometers of a trip in Greater Jakarta during rush hour. For example, a Gojek trip from Sudirman CBD to Kuningan CBD would take approximately 15 minutes and cost Rp12,500 (92 cents) on Gojek. Taking the same trip on the BRT would take 40 minutes and cost Rp3,500 (26 cents).

Online ojeks provides a temporary remedy for residents looking to bypass congestion at low cost. The arrangement seems to work at an individual level in which drivers benefit from the increased demand and passengers benefit from reduced travel time. While online ojeks offer the valuable service that fills in the gap in underserved neighborhoods, their benefits are often offset by negative externalities.

Img 01. Each platform has a unique interface. Left to rigth: Gojek, GrabBike, UberMOTOR

Source:Various

masks, helmets and hair nets. With over 100,000 drivers in uniforms, the ojek industry suddenly became much more prominent on the streets of Jakarta.

Table TraditionalvsvsOnline OnlineOjek Ojek Table 02.

02. Traditional Hailing system Driver organization

Traditional Ojek

Online Ojek

Passengers find drivers at

Passengers call drivers via

a hub

mobile app

Membership with local

Formal partnership with

associations in each hub

large ride-hailing companies

Fees

Daily/monthly

10-20% charge for the

membership fee

ride-hailing companies

Cost per km

Negotiated at each trip

Rp1.500–2.500/km

Payment structure

Direct from passengers to

Indirect via ride-hailing

drivers

companies

Source: Author

For most riders, the biggest draws are theJuly speed and low cost. Motorcycles can Table Gojek’s Cost Structure as of Table03.

03. Gojek’s Cost Structure in Jakarta as 2017 of July 2017

breeze through traffic jams. A trip on an ojek usually takes a fraction of the time Cost per Kilometer needed by public transit or car. As of July 2017, a trip in Greater Jakarta during rush Rush Hour Non-Rush Hour length hour costsTrip Rp2,500 (20 cents) per kilometer for the first 10 kilometers, with a (Mon-Fri, 06.00-09.00 minimum tariff of Rp10,000 (76 cents). A Gojek trip from Sudirman CBD to Kuningan and 16.00-20.00) CBD, for example, would take approximately 15 minutes and cost Rp12,500 (92 0-10 kilometers Rp2.500 Rp1.500 cents). As a comparison, taking the same trip on the BRT would take 40 minutes and >10 kilometers Rp3.000 Rp3.000 cost Rp3,500 (26 cents).

Minimum charge Rp10.000 Rp6.000

Additional charge at 2 Rp3.000 https://www.wsj.com/articles/in-jakarta-ride-hailing-apps-for-motorcycle-taxis-rev-up-1447899407 16.00-20.00 and 23.00-05.00) Additional charge for trips 6-10 kilometers Additional charge for trips 10-20 kilometers Additional charge for trips >20 kilometers

Rp1.500 Rp3.000 Rp6.000

Source: Kumparan.id, 2017

Img 02. Ojek pasengers can cut through traffic by taking online Online motorcycle ojeks taxi provides a temporary remedy for residents looking to bypass congestion at low cost. The arrangement seems to work at an individual level in which drivers benefit from the increased demand and passengers benefit from reduced travel time. While online ojeks offer the valuable service that fills in the gap in underserved neighborhoods, their benefits are often offset by negative externalities.

Benefits Job creation. Gojek, GrabBike and Uber claim that their services have helped create

job opportunities for people with lower levels of education who would otherwise have trouble accessing jobs. Gojek claims that 85% of their drivers hold a junior high or high school diploma. GrabBike also claimed that their drivers earn 34% higher than the minimum wage.

In addition, the fast and easy delivery service has helped spur the growth of small businesses. For example, a passenger can use Gojek’s GoFood to order from street vendors who otherwise do not offer delivery. According to Gojek, small and medium size businesses who partnered with Go-Food have seen a 345% increase in their

Source: rdl.co.id

analysis: benefits Job Creation. Gojek, GrabBike and Uber claim that their services have helped create job opportunities for people with lower levels of education who would otherwise have trouble accessing jobs. Gojek claims that 85% of their drivers hold a junior high or high school diploma (CNN Indonesia, 2017). GrabBike also claimed that their drivers earn 34% higher than the minimum wage (Grab Indonesia, 2017).

In addition, the fast and easy delivery service has helped spur the growth of small businesses. For example, a passenger can use Gojek’s Go-Food to order from street vendors who otherwise do not offer delivery. According to Gojek, small and medium size businesses who partnered with Go-Food have seen a 345% increase in their sales (Warta Ekonomi, 2017). One small fried banana business in West Jakarta, for example, receives orders via 300400 drivers every day.

Img 03. Pisang Goreng Bu Nanik (fried banana Ms Nanik) is one of the top vendors on Go-Food

Source: TripAdvisor, 2017

Reduced individual travel time. Ojeks can weave through the traffic, cutting traveling time significantly during peak hours. UberMotor claimed that their operations in Indonesia have resulted in 38%-time savings (AlphaBeta, 2017), reducing the average travel time from 49 minutes to 30 minutes. Grab Indonesia, the company that operates both GrabBike and GrabCar, released an even more dramatic figure, claiming that their online car and motorcycle taxi services have reduced travel time by 64% compared to public transit (Grab Indonesia, 2017).

During peak hours, even getting on the bus or train can be challenging as these modes do not have a predictable schedule and are often full. The ride-hailing companies respond to this issue by directing drivers to such areas.

Gojek, for example, has created a mechanism where drivers can accumulate points if they pick up passengers in a designated area during peak hours. These points can be exchanged for cash at the end of the day.

Improved safety. All motorcycle drivers in Indonesia are required to have a valid driving license, to carry vehicle registration papers and to wear a helmet when they travel; however, traditional ojek drivers do not always follow these rules, especially when they are operating in an area far from police stations. Most online motorcycle ride-hailing companies have included these rules and added more to their safety standards. For example, Gojek drivers must do an additional training and take a test on safe driving that the company provides for free. Customers can rate the driver and report any violations to the ride-hailing company. Low ratings can result in fewer orders for the driver while safety violations can result in suspension or termination of the driver’s account. The customers and ride-hailing companies have somehow enforced the traffic regulations more effectively than the police force.

In 2017, GrabBike reported that their traffic accident rate is five times lower than the national rate (Grab Indonesia, 2017). While the claim needs to be further studied, such safety improvements are very valuable considering that they influence more than 100,000 online ojek drivers in Greater Jakarta without without accruing additional enforcement costs. Without the right incentive, it is difficult to improve the safety of informal transport.

Img 04. Gojek drivers were encouraged to take a defensive riding training with Rifat Sungkar, Indonesia’s top motorsport driver

Source: Rifat Drive Labs, 2015

analysis: externalities Added congestion from mode shift. A study conducted by Charline Dielen in 2017 asked 548 online ojek users about their mode split. Respondents were asked “Before you became an online ojek user, which mean(s) of transport did you use mostly?” Every respondent is allowed to choose up to five modes. 58% of the responses show that they mostly used public transit (BRT, minivan and commuter line), suggesting that the largest group of adopters are public transit users. The next question asked respondents to identify their current modes of transport besides online ojek. There was a decrease in the reported public transit uses from 496 to only 337 after the respondents started to use online ojek.

The total number of reported public transit uses decreased from 860 to 619. Assuming that the gap reflects the use of online ojek, online ojek made up 28% of all responses.

If we exclude shuttle bus and bajaj since there are too few responses, then the most impacted modes of transport were bus patas (express bus), Metromini/Kopaja (the primary minibus operators) and Commuter Line (electric train)—all of them are public transit modes.

If this study provides a reflection of the actual market, the claim that online ojek as a ride-hailing system reduces the use of private vehicles seems to be misguided. Rather, online ojek is in direct competition with public transport, mainly those modes that are less reliable. Express bus and minibus are taking the largest hit from online ojek competition as they do not have a schedule or sheltered stops.

Nevertheless, it is important to be mindful of the survey’s limitations. First, it did not directly ask people whether or not online ojek has altered their travel behavior. The difference in responses does not necessarily mean that the respondents were attributing that to online ojek. Second, the survey only included online ojek users and did not provide insights on how they behave differently from nonojek users. Lastly, 95% of the responses were recorded

online, suggesting that the survey mainly targeted people who were able to access the internet.

Added congestion from induced trips. Online ojeks bring convenience at a competitive price. While passenger trips might be less elastic (people still have to go to work regardless of online ojeks’ presence), the variety of delivery services might actually induce more trips that did not exist before. Online ojek drivers also congest the street by cruising around while looking for passenger, resulting in unnecessary trips that did not exist when they were waiting for passengers in a traditional ojek hub.

Added congestion from insufficient waiting space. As ondemand service provider, ojeks can pick up and drop off passengers at any location. The sizeable number of online ojeks makes any concentration of drivers at the same stop such as shopping mall disruptive to the traffic. In addition, people often combine using online ojeks with other modes.

Therefore, the drivers will have to pick up or drop off passengers from busy transit stops.

69% of Dielen’s study respondents, who are all online ojek users, use online ojeks in combination with other modes during one journey. One third of users combined ojeks with Commuter Line trains, followed by one fourth who use ojeks in conjunction with Transjakarta BRT. The remaining portion is shared between all other modes. This data suggests that many online ojek trips start or end at a BRT stop or a train station, yet there is no space where passengers or drivers can wait. As a result, drivers take up the already limited space on the street which exacerbates the congestion.

Added pollution. Public transit such as BRT and ambient air pollution which leads to respiratory functions Commuter Line are the two most environmentallyimpairment (Ekpenyong et. al., 2012). friendly transportation modes in Jakarta. Transjakarta’s buses consume natural gas, while Commuter Line trains Domination by online motorcycle companies.Gojek, run electricity. Online ojek’s competition with these modes GrabBike and UberMotor offered subsidized fare to may result in added pollution. Although motorcycles attract new riders when they first entered the market. have better fuel efficiency, they have high emissions of Even though app-based ojek was cheaper than traditional hydrocarbons, carbon monoxide and PM (WHO, 2005). ojek, drivers used to earn more because the app-based Ojek vehicles are also not required to pass any emissions ride hailing companies compensated them for the fare test that are normally required for public transit vehicles, difference. These drivers are increasingly unhappy with the If this study such provides of theas actual market, the claim that ojek receive as a even though testsa reflection have not been effective because feesonline that they now that the marketing period is ride-hailing system theofficers use of private vehicles misguided. the bus drivers oftenreduces bribe the or borrow spareseems to be over.

For example, a driver who did a food delivery within Rather, online ojek is in direct competition with public transport, mainly those modes parts to pass. The ride-hailing companies also have not a range of 6 kilometers used to earn US$1.22. Nowadays that are less reliable. Express bus and minibus are taking the largest hit from online required their drivers to maintain their vehicles periodically. he only nets US$0.92 for the same task. (Tech in Asia, ojek competition as they do not have a schedule or sheltered stops.

2016).

Jakarta residents are already suffering fromofthe Nevertheless, it is important to be mindful thephysical survey’s limitations. First, it did not effects ofask dirtier air. A study by theonline University of Indonesia The drivers claimed directly people whether or not ojek has altered their travel behavior.

The that Gojek, GrabBike and UberMotor in that responses does not necessarily that the respondents werethem by reducing the fee. Many drivers in difference 2011 found 58% of all illnesses amongmean people are abusing attributing thatwere to online ojek. the survey ojekthat users living in the city related toSecond, air pollution (NYT,only included online complain they have to drive day and night to earn and did not provide insights on how they behave differently from non-ojek users.

2015). Motorcyclists (who unlike car drivers do not enough ‘bonus points’ which makes up for the low fee Lastly, 95% of the responses were recorded online, suggesting that the survey mainly have controlled ventilation settings) are more exposed to per kilometer. On November 23, 2017, more than targeted people who were able to access the internet.

1,000 online ojek drivers held a Table 04.

Mode of transportation prior to online ojek demonstration to demand legal status Table 05. Response gap mode split before and after online ojek Before After Gap % Change for their operation. They hope that On-demand transport 172 122 -50 -29.1% a legal status from the government (Online) taxi 59 59 0 0.0% would result in a fairer rate and protect Car share with 54 31 -23 -42.6% them from these companies’ arbitrary family/friends Motorcycleshare with decisions.

44 25 -19 -43.2% family/friends Bajaj

15

7

-8

-53.3%

Public transport

496

337

-159

-32.1%

Transjakarta

139

143

4

2.9%

Angkot

137

104

-33

-24.1%

KRL Commuter Line

131

68

-63

-48.1%

Metromini/Kopaja

60

18

-42

-70.0%

Bus patas

23

3

-20

-87.0%

Shuttle bus

6

1

-5

-83.3%

192

160

-32

-16.7%

Private motorcycle

98

78

-20

-20.4%

Private car

84

75

-9

-10.7%

Bicycle

10

7

-3

-30.0%

860

619

-241

Private transport

Total Source: Author

-28.0% Source:Author

lessons from other countries Thailand and Malaysia have decided to ban online motorcycle taxi companies from operating in their cities; however, despite their proximity, both cities have very different motorcycle taxi situations from Indonesia.

Thailand has a formalized system of motorcycle taxis compared to Indonesia. Its more than 186,000 registered motorcycle taxi drivers were required to directly purchase orange jackets for identification from the country’s Department of Transport. The arrival of GrabBike and UberMoto in the country threatens to disrupt this arrangement (BBC, 2016). As a consequence, the Thai government ordered GrabBike and UberMoto to halt their operations in 2016, and has not lifted the ban since.

Malaysia has taken similar stance, citing safety as the main concern. Dego Ride, the country’s newest ride-hailing app that had over 6,000 online motorcycle taxi drivers registered in the Klang Valley, an area surrounding Kuala Lumpur, was thus forced to stop its then 3-months old operation (Mashable, 2017).

Interestingly, motorcycle taxis seem to have more opportunities to grow in Colombia despite the similar issues of safety and emissions. In smaller cities, motorcycle taxis have even pushed inefficient traditional transit systems into financial hardship and even bankruptcy (We Forum, 2015). Nevertheless, Colombian authorities recognize the importance of motorcycle taxi for local mobility, especially in areas underserved by formal public transport. The City of Monteria, for example, has come up with a micro-feeding scheme using three-wheeled motorbikes (similar to rickshaws) to pick up passengers at their door and transport them to designated rickshaw-bus transfer stops. This feeder ride is free and can be requested via text message.

Another valuable lesson comes from a study of strategies of informal transport operators to access public space in Bogotá. It found that the ‘regulation’ of urban space

is important for the operation of informal transport.

Providing a feeder service for the Transmilenio BRT system, the informal bicycle rickshaws in Bogotá require access to space for parking the vehicles and picking up customers within close physical distance to the Transmilenio station. Road space is highly contested, so bicycle rickshaws associations have resorted to move to other available nearby spaces such as minor roads branching off the main arterial roads or even semi-private spaces. The associations also practice a strict policy to ensure that the operation does not cause any violation of rules in order to avoid conflicts with the authorities (Heinrichs et. al., 2016).

current regulations in indonesia Law of Republic of Indonesia Number 22 Year 2009 concerning Road Traffic and Transportation Law specifies that only vehicles with three wheels or more are acknowledged as legal public transport. As trivial as it sounds, ojeks only have two wheels and the government is therefore not required to regulate or conduct research on ojeks as a mode of public transport. Gojek’s CEO eloquently claimed in 2015 that ‘ojeks are not illegal; they just don’t fall under a specific legal umbrella.’

The Ministry of Transportation banned all online transport services in December 2015. The policy was so heavily opposed by residents and even the President that it only lasted for one day. In October 2017, the government released Regulation of the Minister of Transportation No 108 Year 2017 (PM 108/2017) that allows online car ride-hailing companies to operate in Indonesia with a few stipulations. First, the drivers must join a cooperative and register their car under the cooperative’s name. They are also required to obtain car insurance, special driving licenses and certificate of their car’s road-worthiness (Law Library of Congress, 2016). Lastly, the Ministry of Transport, with advice from the local government (and in Jakarta’s case the Greater Jakarta Board of Transportation), will set a quota, minimum and maximum fare for each area. (Republika, 2017) The goal is to avoid domination by certain companies using price war.

Img 05. Online ojek drivers demand legal status from the government to protect them from ride-hailing companie’s low fare

This regulation, however, does not apply to motorcycle ride-hailing companies because they are not yet acknowledged as a form of public transport. Since then, the government has paid more attention towards motorcycle ride-hailing. The government and the House of Representatives have agreed in 2017 to revise Indonesia’s Road Traffic and Transportation Law to include motorcycle taxis as a form of public transport. Once they are included in the law, the government can impose minimum service and safety requirements (Tech in Asia, 2017).

Source: Liputan6 News, 2017

Recommendations for the Greater Jakarta Transportation The online ojek industry has become so large that it is practically impossible for the government to ban it altogether. Gojek is currently the only Indonesian startup to obtain the prestigious ‘unicorn’ status with a $1.3 billion valuation (Tech in Asia, 2016). Given the country’s limited public transit services, ojeks play an important role in closing the gap in underserved areas. By legitimately addressing the demands for ojeks, the government can further improve the overall transportation system with respect to accessibility for users.

If the Indonesian government decided to include ojeks in the Road Traffic and Transportation Law, it is likely that current requirements for online car taxis in PM 108/2017 will also apply to online motorcycle taxis. The Greater Jakarta Transportation Management Board (BPTJ) will then be responsible for setting the regulations in the Greater Jakarta area. This regulation should strategically target ojek’s externalities without sacrificing its benefits whenever possible.

Added congestion from mode shift. The first question that the Board will need to resolve is what the ojek’s role within the Greater Jakarta transportation system should be. Considering its broad reach and flexibility, ojek should compliment public transit’s fixed route system. Dielen’s research, however, suggests that online ojeks are already competing with BRT. Without a clear framework, the convenient albeit polluting and congestion-inducing ojeks will take away transit ridership even after the construction of the MRT, LRT and BRT extensions are complete.

Under PM 108/2017, the Board is asked to set the minimum and maximum online ojek fare in Greater Jakarta. While such a system is beneficial in limiting the power of the ride-hailing companies (who are currently in a price war at the expense of the driver’s income), the Board should consider leveraging this mechanism to integrate online ojek into the city’s public transit system.

Learning from the Monteria, it can combine the fare into a system of public transit incentives. For example, the Board can set a lower minimum fare if a trip begins or ends at a transit stop, i.e. a passenger taking ojek from Stasiun Depok to her house pays lower minimum fare than if she takes it from another non-transit stop. This mechanism is technologically possible as demonstrated by the ridehailing companies’ driver bonus system that takes into account the origin or destination of a trip.

Added congestion from waiting space. If online ojeks are positioned as first- and last-mile services that connect passengers to the public transit system, the new regulation should specifically designate a space that facilitates modal interchange.

Learning from Bogotá, such connections need to be facilitated by providing the infrastructure for ojeks to pick up and drop off passengers at the transit stations.

Grab Indonesia recently partnered with Commuter Line to launch GrabNow, a service that allows passenger to easily order an ojek via self-service machines in 49 train stations in Jakarta. The passenger meets the driver at GrabVenue, the official pick-up point located at the station’s exit. This nascent service represents ride-hailing companies’ desire to complement public transit services. The government could further ease such connections by constructing official waiting spaces near transit stations that do not disrupt traffic and “sell” the spots to online ojek companies.

Management Board (BPTJ) Added pollution. In order to reduce the excessive emissions of hydrocarbons, carbon monoxide and PM, ojek vehicles should be required to pass emissions tests for public transit vehicles, such as those required of buses. The government struggled to enforce this regulation in the past because the bus driver cooperatives did not have a clear policy on emissions and therefore did not closely monitor their members’ vehicle conditions. If a bus driver can bribe an officer to pass the emissions test, he can operate. Ridehailing companies, on the other hand, are concerned with their drivers’ vehicle condition. For example, GrabBike, requires that their ojek drivers own motorcycles that were manufactured no earlier than 2008. They did not, however, inspect the motorcycles’ emissions levels.

Ride-hailing companies’ presence could help the government reduce pollution by involving these companies as second-tier enforcer in the regulation. For example, the government can require that (1) online ojek drivers pass emissions tests and (2) ride-hailing companies consider non-compliance as a violation that affects drivers’ ratings.

If a driver’s vehicle was found to be non-compliant, police officers can issue a ticket that is addressed to both the driver and his ride-hailing company.

Img 06. Online ojek drivers waiting for their passengers in Palmerah Station, Jakarta

Img 07. GrabNow self-service machine next to the Pick-up and Drop-off point in Poris Station, Jakarta

Source: Kumparan, 2017

Source: thepicta.com, 2017

The rise of app-based motorcycle taxis in Greater Jakarta should be seen as an opportunity to further improve accessibility to the region’s overall transportation system.

Ojek services have proved to be valuable in filling in the gap in underserved neighborhoods.

This cost-and-benefit analysis can help the Greater Jakarta Transportation Management Board and other government agencies currently responding to the rise of ride-hailing companies craft a more sophisticated regulation that specifically targets the externalities of online motorcycle taxis without sacrificing their benefits.

With the right framework, cities can go beyond banning or unregulating—instead, it can make the most of the growing presence of ride-hailing companies.