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Ada Pertanyaan? Hubungi Kami Marcell Sihombing, M. Yasin, Fitri N. Heriani
Drivers of Gojek, an app-based transportation. Photo by: RES
The battle that is presently hotting up between Indonesia’s newly-founded, application-based motorcycle taxis (commonly referred as ojek in Indonesia) and the more conventional, time-honored, street-corner ojeks is currently a contentious issue. A national discussion event titled, “Analyzing the Legal, Economic, and Social Aspects of the Gojek Phenomenon” was even held at the University of Indonesia’s prestigious Faculty of Law (Fakultas Hukum Universitas Indonesia – FHUI) last Thursday (17 September 2015).
One of the speakers at the discussion was a coordinator of conventional ojeks named Mulyadi, who boldly declared that there was no competitive rivalry between conventional ojeks and the new online, application-based ojeks. According to Mr. Mulyadi, online ojeks will not render conventional ojeks obsolete, and this, he claimed, was especially true in and around the University of Indonesia’s Depok campus where he worked.
Mr. Mulyadi may well be right, as the income that a given ojek driver makes depends largely on his or her individual efforts. Nonetheless, competition between conventional ojeks and the online pretenders to their crown is as real as can be. Indeed, this rivalry has already spurred a number of aggressive incidents, including boycotts, blockades, and harassment.
One issue of particular concern arose during the discussion, namely the possibility of bringing a case before the Business Competition Supervisory Commission (KPPU). However, it remains unclear how the country’s competition law applies as regards the current competition between conventional ojeks and online ojeks. Whether the battle of the ojeks is a legal issue or not is still uncertain, given that neither conventional ojegs nor the new online upstarts are officially licensed and currently have no legal status.
Ditha Wiradiputra, an FHUI competition-law lecturer, attempted to offer some insight into the matter and suggested that it might be possible to bring a predatory-pricing case before the KPPU. However Mr. Wiradiputra stressed that determining how many ojek drivers were experiencing actual losses in income would be a very tricky task.
“Predatory pricing” is a term that refers to businesses which set their prices far below the cost of production with the explicit intention of snuffing out their competitors. Article 2o of Law No. 5 0f 1999 (Anti-Monopoly Law) stipulates that, “Business practitioners are prohibited from supplying goods and/or services by way of unprofitable sales or setting extremely low prices with the intention of eliminating or obstructing the businesses of their competitors in such a way as to establish a monopoly or an unhealthy business environment.”
The new application-based ojek businesses are, it is alleged, setting prices below those demanded by conventional, street-corner ojeks. One online ojek company, for example, was charging a mere IDR 10,000 for a maximum trip of 25 km during one of its promotional periods. However, suspicion of predatory pricing practices is insufficient on its own, as proof is required in order that any legal case be pursued.
Mr. Wiradiputra asserts that the element of, “unprofitable sale,” plays an important role in any determination of predatory pricing practices and points out that it has to be ascertained whether any suspiciously low rates have been set below operational costs or not. Clarification also has to be sought as to whether any suspiciously low rates only apply during promotional periods or whether they remain effective after such periods have ended.
“The problem is that ojeks do not have a standardized tariff,” explained Mr. Wiradiputra.
Also commenting on the issue was Muhammad Reza, the Chair of the KPPU’s Legal, Public Relations, and Cooperation Bureau. Mr. Reza asserted that any determination of predatory pricing relied heavily on being able to prove whether online ojek companies were attempting to eliminate their competitors or not. Mr. Reza told hukumonline that proving any such intentions would be extremely difficult.
KPPU yet to act
Mr. Reza also revealed that the KPPU had not yet received any complaints regarding online ojek businesses, either from a direct competitor or from an independent third party. Reza also stated that his institution had not opened any investigations yet. Despite this, the KPPU remains vigilant over any developments as regards online ojek businesses. Moreover, the KPPU still intends to clarify whether the competition law is applicable to ojeks or not, bearing in mind that the legality of both online ojeks and conventional ojeks is debatable.
Issues of legality aside, it is important to weigh up both the negatives and positives of online ojek businesses, according to Mr. Reza. Beyond the issues of competition and price-fixing, the new app-based businesses offer innovation and creativity, as well as convenience for passengers and money-making opportunity for ojek drivers.
(sp)
Marcell Sihombing, M. Yasin, Fitri N. Heriani
Drivers of Gojek, an app-based transportation. Photo by: RES
The battle that is presently hotting up between Indonesia’s newly-founded, application-based motorcycle taxis (commonly referred as ojek in Indonesia) and the more conventional, time-honored, street-corner ojeks is currently a contentious issue. A national discussion event titled, “Analyzing the Legal, Economic, and Social Aspects of the Gojek Phenomenon” was even held at the University of Indonesia’s prestigious Faculty of Law (Fakultas Hukum Universitas Indonesia – FHUI) last Thursday (17 September 2015).
One of the speakers at the discussion was a coordinator of conventional ojeks named Mulyadi, who boldly declared that there was no competitive rivalry between conventional ojeks and the new online, application-based ojeks. According to Mr. Mulyadi, online ojeks will not render conventional ojeks obsolete, and this, he claimed, was especially true in and around the University of Indonesia’s Depok campus where he worked.
Mr. Mulyadi may well be right, as the income that a given ojek driver makes depends largely on his or her individual efforts. Nonetheless, competition between conventional ojeks and the online pretenders to their crown is as real as can be. Indeed, this rivalry has already spurred a number of aggressive incidents, including boycotts, blockades, and harassment.
One issue of particular concern arose during the discussion, namely the possibility of bringing a case before the Business Competition Supervisory Commission (KPPU). However, it remains unclear how the country’s competition law applies as regards the current competition between conventional ojeks and online ojeks. Whether the battle of the ojeks is a legal issue or not is still uncertain, given that neither conventional ojegs nor the new online upstarts are officially licensed and currently have no legal status.
Ditha Wiradiputra, an FHUI competition-law lecturer, attempted to offer some insight into the matter and suggested that it might be possible to bring a predatory-pricing case before the KPPU. However Mr. Wiradiputra stressed that determining how many ojek drivers were experiencing actual losses in income would be a very tricky task.
“Predatory pricing” is a term that refers to businesses which set their prices far below the cost of production with the explicit intention of snuffing out their competitors. Article 2o of Law No. 5 0f 1999 (Anti-Monopoly Law) stipulates that, “Business practitioners are prohibited from supplying goods and/or services by way of unprofitable sales or setting extremely low prices with the intention of eliminating or obstructing the businesses of their competitors in such a way as to establish a monopoly or an unhealthy business environment.”
The new application-based ojek businesses are, it is alleged, setting prices below those demanded by conventional, street-corner ojeks. One online ojek company, for example, was charging a mere IDR 10,000 for a maximum trip of 25 km during one of its promotional periods. However, suspicion of predatory pricing practices is insufficient on its own, as proof is required in order that any legal case be pursued.
Mr. Wiradiputra asserts that the element of, “unprofitable sale,” plays an important role in any determination of predatory pricing practices and points out that it has to be ascertained whether any suspiciously low rates have been set below operational costs or not. Clarification also has to be sought as to whether any suspiciously low rates only apply during promotional periods or whether they remain effective after such periods have ended.
“The problem is that ojeks do not have a standardized tariff,” explained Mr. Wiradiputra.
Also commenting on the issue was Muhammad Reza, the Chair of the KPPU’s Legal, Public Relations, and Cooperation Bureau. Mr. Reza asserted that any determination of predatory pricing relied heavily on being able to prove whether online ojek companies were attempting to eliminate their competitors or not. Mr. Reza told hukumonline that proving any such intentions would be extremely difficult.
KPPU yet to act
Mr. Reza also revealed that the KPPU had not yet received any complaints regarding online ojek businesses, either from a direct competitor or from an independent third party. Reza also stated that his institution had not opened any investigations yet. Despite this, the KPPU remains vigilant over any developments as regards online ojek businesses. Moreover, the KPPU still intends to clarify whether the competition law is applicable to ojeks or not, bearing in mind that the legality of both online ojeks and conventional ojeks is debatable.
Issues of legality aside, it is important to weigh up both the negatives and positives of online ojek businesses, according to Mr. Reza. Beyond the issues of competition and price-fixing, the new app-based businesses offer innovation and creativity, as well as convenience for passengers and money-making opportunity for ojek drivers.
(sp)