Online Application-Based Transportation Services Not Recognized under Indonesian Labor Law

 
Nadia Maharani, Fathan Qorib
 
Motorcycle taxis, which are commonly referred to as ojek in Indonesia, are always highly in demand here, especially in the country's larger urban centers, with their perpetual traffic jams and many narrow roads.
 
Anyone with access to a motorcycle can become an ojek driver in fact, and more recently, the rise of mobile technology has enabled entrepreneurs to create online applications capable of meeting the need for cheaper, more reliable, and better organized transportation.
 
Online transportation apps such as Go-Jek, GrabBike and Uber Taxi have blossomed here, especially in Jakarta. Online passengers need only download the app onto their device and then create an account.
 
The app will then locate the nearest available driver and within minutes the passenger will find herself winging her way to her destination, and all for a price that considerably undercuts the normal rates offered by both traditional street-corner ojeks and city taxis.
 
Over the past few days, Hall A at the Gelora Bung Karno stadium in the Senayan area of downtown Jakarta has been packed with thousands of applicants hoping to become Go-Jek drivers. This new phenomenon, however, raises questions regarding the working relations that exist between companies and their online drivers.
 
A Go-Jek driver, who asked to remain anonymous, explained the working system behind the currently booming company. The 37-year-old Go-Jek driver confirmed to hukumonline that the company offers no agreements detailing set working hours and also keeps hold of his degree throughout the duration of his employment by the company.
 
“Go-Jek refers to us as its partners,” the driver told us last Tuesday.
 
Becoming a Go-Jek employee requires that potential drivers submit to the company's bureaucratic procedures, including the handing over of certificates as guarantees, and possession of a valid driving license (something that many regular ojek drivers don't have). However, our source told us that the increase in income meant that this process was well worth the effort.
 
“[My] income has increased dramatically, and is now maybe five or six times more than my former income as a regular ojek driver,” explained our driver, who previously worked as an independent ojek driver for 11 years.
 
Our source also told us that the rapidly expanding company offers plenty of health benefits to its employees, in spite of its inability to offer any government-based health insurance or social security (Jamsostek) facilities. This inability is due to Indonesia's Labor Law not recognizing partnership-based employment agreements of the kind that Go-Jek offers to its employees.
 
The company aims to guarantee its employees health benefits however, and our driver expressed the hope that Go-Jek would eventually be able to offer Jamsostek facilities for its drivers.
 
“My personal hope is that we are acknowledged as official employees, as Go-Jek is already a company. We just want our voices to be heard so that Go-Jek will provide Jamsostek facilities to its drivers,” our source said.
 
Labor Law expert, Umar Kasim, has reminded the relevant parties here though that Law No. 13 of 2003 on Labor does not recognize employment  based on partnership agreements, and in fact only recognizes contract-based agreements.
 
“Labor Law No. 13 of 2003 only specifies working relations based on contracts,” explained Mr. Kasim.
 
However, Mr. Kasim also declared that Law No. 14 of 1969 on General Labor Provisions covers a wider area in terms of working relations, which can be based on partnerships, services, letters of appointment, and contracts, to name but a few.
 
Meanwhile, Labor Law No. 13 of 2003 states that employees working through partnership agreements do not have to adhere to set working hours or leaves of absence, with or without pay. However, partnership-based employees may still demand Jamsostek or other types of insurance from their companies.
 
“It’s possible, but this isn't based on the Law, since public insurance does not adhere to the Labor Law, but to contract agreement,” Mr. Kasim said.
 
The law expert stated that a contract-based employee would sign over all of his rights to the company and, in turn, the company would then provide benefits for them. A partnership-based employee is responsible for his or her own conduct and health however, and any intellectual property rights remain in possession of the owner.
 
“For example, in a partnership-based agreement, if a vehicle is damaged, then it is a personal problem, but the IPR still belongs to the owner. For example if a driver finds a new solution and patents his idea, it then becomes his personal right, not the company’s,” Mr. Kasim concluded.
 
(sp)
 
Nadia Maharani, Fathan Qorib
 
Motorcycle taxis, which are commonly referred to as ojek in Indonesia, are always highly in demand here, especially in the country's larger urban centers, with their perpetual traffic jams and many narrow roads.
 
Anyone with access to a motorcycle can become an ojek driver in fact, and more recently, the rise of mobile technology has enabled entrepreneurs to create online applications capable of meeting the need for cheaper, more reliable, and better organized transportation.
 
Online transportation apps such as Go-Jek, GrabBike and Uber Taxi have blossomed here, especially in Jakarta. Online passengers need only download the app onto their device and then create an account.
 
The app will then locate the nearest available driver and within minutes the passenger will find herself winging her way to her destination, and all for a price that considerably undercuts the normal rates offered by both traditional street-corner ojeks and city taxis.
 
Over the past few days, Hall A at the Gelora Bung Karno stadium in the Senayan area of downtown Jakarta has been packed with thousands of applicants hoping to become Go-Jek drivers. This new phenomenon, however, raises questions regarding the working relations that exist between companies and their online drivers.
 
A Go-Jek driver, who asked to remain anonymous, explained the working system behind the currently booming company. The 37-year-old Go-Jek driver confirmed to hukumonline that the company offers no agreements detailing set working hours and also keeps hold of his degree throughout the duration of his employment by the company.
 
“Go-Jek refers to us as its partners,” the driver told us last Tuesday.
 
Becoming a Go-Jek employee requires that potential drivers submit to the company's bureaucratic procedures, including the handing over of certificates as guarantees, and possession of a valid driving license (something that many regular ojek drivers don't have). However, our source told us that the increase in income meant that this process was well worth the effort.
 
“[My] income has increased dramatically, and is now maybe five or six times more than my former income as a regular ojek driver,” explained our driver, who previously worked as an independent ojek driver for 11 years.
 
Our source also told us that the rapidly expanding company offers plenty of health benefits to its employees, in spite of its inability to offer any government-based health insurance or social security (Jamsostek) facilities. This inability is due to Indonesia's Labor Law not recognizing partnership-based employment agreements of the kind that Go-Jek offers to its employees.
 
The company aims to guarantee its employees health benefits however, and our driver expressed the hope that Go-Jek would eventually be able to offer Jamsostek facilities for its drivers.
 
“My personal hope is that we are acknowledged as official employees, as Go-Jek is already a company. We just want our voices to be heard so that Go-Jek will provide Jamsostek facilities to its drivers,” our source said.
 
Labor Law expert, Umar Kasim, has reminded the relevant parties here though that Law No. 13 of 2003 on Labor does not recognize employment  based on partnership agreements, and in fact only recognizes contract-based agreements.
 
“Labor Law No. 13 of 2003 only specifies working relations based on contracts,” explained Mr. Kasim.
 
However, Mr. Kasim also declared that Law No. 14 of 1969 on General Labor Provisions covers a wider area in terms of working relations, which can be based on partnerships, services, letters of appointment, and contracts, to name but a few.
 
Meanwhile, Labor Law No. 13 of 2003 states that employees working through partnership agreements do not have to adhere to set working hours or leaves of absence, with or without pay. However, partnership-based employees may still demand Jamsostek or other types of insurance from their companies.
 
“It’s possible, but this isn't based on the Law, since public insurance does not adhere to the Labor Law, but to contract agreement,” Mr. Kasim said.
 
The law expert stated that a contract-based employee would sign over all of his rights to the company and, in turn, the company would then provide benefits for them. A partnership-based employee is responsible for his or her own conduct and health however, and any intellectual property rights remain in possession of the owner.
 
“For example, in a partnership-based agreement, if a vehicle is damaged, then it is a personal problem, but the IPR still belongs to the owner. For example if a driver finds a new solution and patents his idea, it then becomes his personal right, not the company’s,” Mr. Kasim concluded.
 
(sp)
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