Indonesia is reportedly preparing to significantly expand financial and social protections for ride-hailing drivers, in a move that could disrupt the profitability of the country’s booming gig economy. Two sources familiar with the matter said that President Prabowo Subianto is considering a draft decree that would drastically increase benefits for drivers across the nation.
The proposed measures come amid rising pressure from drivers, whose activism has highlighted their political influence. In August, widespread student-led protests drew attention to drivers’ working conditions, culminating in the death of a motorcycle taxi rider, which intensified public scrutiny of gig workers’ vulnerability. Presidential spokesperson Prasetyo Hadi has described drivers as “heroes of the economy,” underscoring the administration’s sensitivity to the sector.
The draft decree reportedly includes several key provisions that would reshape the ride-hailing landscape. Most notably, it would halve the cap on commissions—the percentage of each fare that platforms retain—from 20% to 10%. Indonesia is the only country in Southeast Asia to impose commission caps for two-wheel ride-hailing services, and the proposed reduction would further constrain margins for companies like GoTo, Indonesia’s homegrown platform, and Singapore-based Grab.
The decree would also require platforms to fully cover accident and death insurance for drivers, a cost estimated at around US$1 per month per driver for the country’s roughly seven million delivery and transport riders. In addition, it would mandate shared contributions toward health, old-age, and pension premiums, potentially raising operating costs for platforms even further.
“Most of the players in the industry cannot sustain these changes,” an industry source familiar with the draft told Reuters, warning that insurance obligations could push annual spending sharply higher. A second source said that higher premiums could also reduce the number of drivers platforms are able to accommodate.
For years, ride-hailing companies have resisted extending traditional employment benefits to drivers, arguing that gig workers are independent contractors rather than full-time employees. If enacted, the decree could represent a significant shift in Indonesia’s labor framework for digital transport services.
The draft would also allow the government to review agreements between platforms and drivers, while explicitly protecting workers’ right to unionize. These provisions may empower drivers to negotiate stronger protections and improve collective bargaining power, marking a departure from the largely informal arrangements that have dominated the sector.
Analysts note that the timing of the decree is significant. Concerns over driver welfare have intensified as GoTo and Grab explore a potential merger, which critics warn could create a near-monopoly and further disadvantage drivers. The decree would also extend to on-demand logistics firms, including Hong Kong-based Lalamove and publicly listed J&T Express, broadening its potential economic impact.
Indonesia has emerged as a leading market for ride-hailing in Southeast Asia. According to India-based research firm Mordor Intelligence, in 2024 the country accounted for 37% of the ASEAN taxi market, driven by population size and rapid adoption of digital payments.
“Motorcycle taxi drivers have become an increasingly visible political force, staging multiple protests over commission rates and rights and drawing significant public attention to their grievances,” said Siwage Dharma Negara, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore. He added that the fatality during the August protests likely heightened political urgency around protecting gig workers.
The Indonesian government and the presidential office did not respond to Reuters requests for comment, and details of the decree—including whether it is final or when it might be enforced—remain unclear. Nevertheless, the proposals underscore a growing focus on balancing corporate profitability with worker welfare in Indonesia’s rapidly expanding digital economy.
