It's a street battle with plenty of fumes. Taxi drivers versus ride hailing apps — a drama that's played out in major cities around the world. But in Jakarta, Indonesia, traditional taxi drivers just scored a win: New regulations set to take effect April 1 will make it harder for Uber, Grab and Go-Jek to compete.
Indonesia's biggest taxi company, Blue Bird, couldn't be happier.
"At the end of the day most of these regulations are about leveling the playing field," Blue Bird Group CFO Daniel Phua told CNBC. "It's making sure that the same regulation applies to all parties. So as you know, there are a lot of the new players. Because technology is moving so fast, regulations have to catch up."
The new regulations say municipalities can set a price cap on fares charged by ride-hailing app companies and also limit the number of vehicles operating in a district. In addition, drivers must possess a vocational license for public transportation.
Grab Indonesia, the domestic arm of Southeast Asian ride-hailing company Grab, calls the new rules protectionist.
"The government's proposed intervention on pricing will mean passengers end up paying more for a ride than they need to. We believe that a fully flexible pricing approach that responds to the needs of the market is the most efficient approach to price-setting," wrote Ridzki Kramadibrata, managing director of Grab Indonesia in a statement on Friday.
"Second, setting vehicle quotas encourages monopolistic positions, restricts the number of people that can benefit from our services. Third, the proposed change that requires our drivers to transfer STNK (vehicle registration certificate) to a business cooperative takes away our drivers' potential to own their cars eventually."