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Indonesia announce large-scale social restriction policy, affecting passenger transport

Ride-hailing business dropped 50% to 80% in the past three weeks, according to the association of online motorcycle drivers.

The Indonesian government officially announced a large-scale social restriction policy on Sunday as part of the government’s strategy to curb the spread of coronavirus in the country. The new policy shuts down various public activities such as religious gatherings, social-cultural activities, and other activities that include large crowds. In addition, the government is closing down schools and entertainment venues temporarily.

This new policy also bans online motorcycle services, which can only operate delivery services during this period. Grab Indonesia said it will follow the guidelines and is coordinating with related parties. “Since the beginning of the COVID-19 outbreak in December, Grab Indonesia has been monitoring the situation and is preparing all stakeholders including our driver partners,” Grab Indonesia’s head of public affairs Tri Sukma Anreianno told KrASIA.

Grab has taken several precautionary measures to ensure hygiene, by advising drivers to wear masks at all times, to disinfect their vehicles and shipping bags regularly, as well as to wash and clean their hands frequently, Anreianno added. The company has also introduced contactless delivery for its GrabFood and GrabExpress services to minimize physical contact between persons. Using the in-app chat function, customers can direct drivers to drop off their orders at specific locations.

Nonetheless, the limitation of the public’s mobility has a direct impact on drivers. Indonesia’s online motorcycle driver association (Garda) said that demand for orders has dropped dramatically around 50% to 80% over the past three weeks, when the president called citizens to work and study from home. As a result, the daily income of the drivers also decreased significantly.

Garda fears that the new policy will worsen this situation. Therefore, the association demands government to provide some compensation for the lost revenue in the form of immediate cash assistance of 50% of drivers’ normal income or at least IDR 100,000 per day.

“We asked companies to deactivate the passenger feature and to continue to promote food and goods delivery services to increase orders. We believe it is an obligation for ride-hailing providers to ensure that driver partners still have a source of income,” Garda chairman and spokesperson Igun Wicaksono told KrASIA. The association also hopes that during the pandemic, ride-hailing companies reduce the 20% commission cuts they take from drivers.

Multiple initiatives from Gojek and Grab

Gojek has yet to respond to KrASIA’s request for comment. Both Gojek and Grab have presented several initiatives to help their partners deal with the COVID-19 crisis. Gojek launched a partner support fund into which the co-CEOs and senior management will donate 25% of their annual salary over the next 12 months. Last week, the company released 12 driver welfare programs that include vehicle loan payment relief and income assistance for drivers who are diagnosed with COVID-19 or put in mandatory quarantine.

Grab has also introduced a similar program. The company’s senior leaders will take salary cuts of up to 20% to fund several “Partner Relief Initiatives”, which provide assistance and support for drivers and merchants across the region.

Even so, the new policy will inevitably affect drivers and ride-hailing companies. Many non-profit foundations, crowdfunding platforms, and local communities are initiating their own welfare programs to help those who lost their jobs or daily incomes due to the pandemic. As of April 6, Indonesia has 2273 confirmed COVID-19 cases, with 198 confirmed deaths and 164 discharges.