Vol. 5, No. 7, July 2024
E-ISSN: 2723-6692
P-ISSN: 2723-6595
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KEYWORDS
ABSTRACT
Bidding System; Predatory
Pricing; Online
Transportation.
This research aims to understand the practice of fare
determination through a bidding system on online transportation
applications based on Competition Law in Indonesia and to
examine the supervision of fare determination actions through a
bidding system on online transportation applications based on the
applicable laws and regulations. This research employs a
normative juridical analysis with a descriptive-analytical method
by explaining the practice of fare determination using a bidding
system and subsequently analyzing it using existing legal theories
and norms. The results of this research indicate that the fare
determination actions taken by online transportation business
operators using a bidding system potentially violate the provisions
of Article 20 of the Business Competition Law regarding the
prohibition of predatory pricing and the Decree of the Minister of
Transportation Number KP 667 in conjunction with the Decree of
the Minister of Transportation Number KP 1001 concerning the
Guidelines for Calculating Service Costs for Motorcycles Used with
Applications, as well as the Minister of Transportation Regulation
Number 12 of 2019 on the Protection of Safety for Motorcycle
Users Used for Community Interests. Supervision of the actions of
online transportation business operators in setting prices using a
bidding system is conducted by two institutions, namely KPPU
(Commission for the Supervision of Business Competition) and the
Ministry of Transportation, both preventively and repressively.
Attribution-ShareAlike 4.0 International (CC BY-SA 4.0)
1. Introduction
Transportation is one of the factors used to support the activities of each individual. The
increasing mobility of the community is of course in line with the increasing demand for adequate
Determination of Fares for Online Transportation Applications
with A Fare Bargaining System is Linked to Business Competition
Law in Indonesia
Bernadetta Satyaayu Regitaningtyas Kalaj, Elisatris Gultom, Deviana Yuanitasari
Universitas Padjadjaran, Bandung, Indonesia
Email: Bernadetta20001@mail.unpad.ac.id, elisatris68@gmail.com,
deviana.yuanitasar[email protected].id
Correspondence: Bernadetta20001@mail.unpad.ac.id
*
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transportation facilities. Therefore, to support economic progress in Indonesia, various modes of
transportation are needed that can be reached and accessed by all people in Indonesia. The need for
affordable and effective transportation has spurred innovation. As in the past decade, various
innovations have emerged in the development of the transportation sector by utilizing the Industry
4.0 era. The industrial world combines automation technology with cyber technology, where
people's activities are interconnected with the internet or satellite network, so that a paradigm
emerges, an era of very sophisticated human life (Hatmoko et al., 2021). Until finally now industrial
civilization has been more advanced with the era of society 5.0. This era is a period that is human-
centered and technology-based. The shift of this era allows artificial intelligence (artificial
intelligence) to be fully dedicated to improving human ability to find and open up various
opportunities owned by human beings (Rahmawan & Effendi, 2022). This gives rise to a technological
sustainability that causes all activities to always be connected to the Internet network commonly
called the Internet of Things (IoT) (Ariyanti, 2016).
The development of integration between technology and daily needs has given rise to the
latest innovation with the presence of online transportation applications. An online transportation
application is an application that can be downloaded on a user's mobile phone that provides
transportation services using an online platform, such as an application that connects passengers
with driver-partners, passengers determine the pick-up location and destination and with a certain
fare, where this service is managed by a third party, namely a transportation network company
(Pham et al., 2017). This is what distinguishes online transportation applications from conventional
transportation providers, where there is a third party, namely the application manager (Pratama et
al., 2016). With the emergence of this online transportation application service, of course, it makes it
easier for people to choose a variety of transportation modes.
The development of integration between technology and daily needs has given rise to the
latest innovation with the presence of transportation applications Online. Transportation
applications Online is an application that can be downloaded on the user's mobile phone that
provides transportation services using Online Platform, such as an application that connects
passengers with driver-partners, passengers determine the pick-up location and destination and
with a certain fare, where this service is managed by a third party, namely a transportation network
company (Christina et al., 2018). In Indonesia itself, the development of transportation applications
Online began to be known in 2010 with the establishment of Go-Jek as the first local company to
provide transportation application services Online. Then in 2011 followed by Grab and Uber in
2014. This was followed by the proliferation of other applications such as inDriver, Maxim, Call Jack,
Ojekkoe, Topjek, LadyJek, Bluejek, Ojek Argo, etc (Dewi, 2023). Since then, the development of
online transportation application services has begun to become more varied and competitive with
the emergence of various other applications that offer similar services.
In discussing the strategies carried out by every business actor, not long ago in 2019 entered a
new online transportation application, namely inDrive, which offers a pricing system that is
different from other online transportation application services (Rochman, 2022).
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The difference between inDrive with other applications is that inDrive shows that its tariff
setting model is done on a peer-to-peer basis without involving complex algorithms like other
companies. This is contrary to the meaning of the online transportation application itself, which in
general the price of this online transportation application service is fixed. Meanwhile, inDrive
provides flexibility for partners and customers to set and choose their prices.
The fare bidding system on online transportation applications is not common in Indonesia.
The majority of online transportation applications in Indonesia, such as Gojek, Grab, Maxim, and
others, use a fixed price by dynamic pricing system or fare calculation based on distance and travel
time. In a fixed price system, the rate displayed to the user is a price that has been determined by
the system's algorithm and is non-negotiable. Recently, Gojek even tried a similar bidding system
for GoRide Nego services in certain areas (Saputro, 2023).
The problem related to online transportation application services is that the rates set can of
course have an impact on similar business actors. With the freedom to bid and price tariff services
for its services. This can lead to the possibility of offering lower app rates or higher rates. While this
approach has significant benefits, it also raises several issues that need to be considered, especially
related to business competition. Similar business actors have provided fixed rates with rates that
have been adjusted to the rules that have been set by the Ministry of Transportation with the Decree
of the Minister of Transportation Number KP 667 of 2022 concerning Guidelines for the Calculation
of Service Fees for the Use of Motorcycles Used for the Benefit of the Community carried out with
applications (KP 667 of 2022).
The fare bidding system offers flexibility but also raises concerns about business competition
and pricing fairness. With the price bidding system, this can cause price offers that tend to be lower
than the lower brick tariff as regulated in KP 667 of 2022. This tends to meet the element of
predatory pricing. As regulated in the type of prohibited activities, namely Market Domination with
the provisions of Article 20 of Law Number 5 of 1999 (Law 5/1999) concerning "Business actors are
prohibited from supplying goods and or services by selling at a loss or setting a very low price with
the intention of getting rid of or shutting down the business of their competitors in the market
concerned so that it can result in monopolistic practices and/or unfair business competition." This
could lead to market domination and reduce the number of available apps, limiting consumer
choice.
2. Materials and Methods
The approach method used in this study is the normative juridical analysis method, which is
carried out by researching and studying literature materials, secondary data consisting of primary
legal materials, and secondary legal materials, and this method uses the object of the study of
tertiary legal materials that will be analysed qualitatively. The main reference in this study is Law
Number 5 of 1999 concerning the Prohibition of Monopoly Practices and Unfair Business
Competition. Legal research in the event of potential violations of predatory pricing in the
implementation of the bargaining system in online transportation applications was reviewed based
on Law No. 5 of 1999 and assisted by the Regulation of the Business Competition Supervisory
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Commission No. 5 of 2010 concerning Guidelines for the Implementation of Article 20 of Law No. 5
of 1999.
3. Result and Discussion
Predatory Pricing as Regulated in Law Number 5 of 1999 concerning Prohibition of
Monopolistic Practices and Unfair Business Competition.
To achieve the welfare of Indonesian citizens, community involvement in economic
development is essential, especially through the participation of business actors. However, the
pursuit of maximum profits by these actors has led to monopolistic practices, corruption, and
unfair competition, which contradict the principles outlined in Article 33 of the 1945
Constitution. In response to the economic crisis and under pressure from the International
Monetary Fund (IMF), Indonesia enacted Law 5/1999., this was a key part of economic reforms
aimed at curbing corruption, collusion, and nepotism, and fostering a competitive business
environment. The law plays a crucial role in promoting fair competition, innovation, and
efficiency, aligning with the constitutional goal of economic democracy and national welfare.
Law Number 5 of 1999 establishes regulations to prevent practices detrimental to healthy
and fair business competition, focusing on three main areas: prohibited agreements, prohibited
activities, and abuse of dominant positions. Prohibited agreements involve contracts between
business actors that result in monopolistic practices and unfair competition, as outlined in
twelve specific articles. Prohibited activities, on the other hand, can be carried out by a single
business actor and include actions like monopolies and market control that disrupt fair
competition. The abuse of dominant positions, described in four articles, occurs when a business
actor dominates the market, impacting competition. Each prohibition is governed by specific
elements and regulations, with the main difference between agreements and activities being the
number of parties involved (Indonesia, 2019).
Violations under the Business Competition Law are analyzed using two approaches: the
per se illegal approach and the rule of reason. The per se illegal approach automatically deems
certain activities or agreements as illegal without requiring further proof of their impact,
focusing on inherently harmful actions. In contrast, the rule of reason approach involves a more
detailed analysis to determine whether the conduct in question unreasonably restricts
competition. The choice of approach depends on the specific type of prohibition outlined in Law
No. 5 of 1999.
Article 20 of the Business Competition Law prohibits predatory pricing, where business
actors supply goods or services at a loss or set very low prices with the intent to eliminate
competitors, leading to monopolistic practices and unfair competition. This regulation outlines
several key elements necessary to prove predatory pricing, including the involvement of
business actors, the supply of goods or services, setting very low prices, and the intent to drive
competitors out of the market. The law also differentiates between product and geographical
markets, emphasizing that predatory pricing becomes anti-competitive when it leads to
monopolistic control or unfair competition. Predatory pricing is not inherently illegal; it becomes
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a violation only if it meets specific criteria, such as shutting down competitors, creating barriers
to entry, or pursuing future profits at the expense of competition. To prove predatory pricing,
several tests are employed, including the Price Cost Test, Areeda Turner Test, Average Total Cost
Test, Average Avoidable Cost Test, and Recoupment Test. KPPU conducts a three-stage
assessment process to evaluate predatory pricing cases, examining the reasonableness of pricing,
the potential for recoupment of losses, and a detailed price-cost comparison to determine
whether the conduct is anti-competitive.
The Practice of Applying Bidding System in Online Transportation Application Tariff
Activities
In Indonesia, the online transportation sector has seen rapid growth since the introduction
of services like Uber, Gojek, and Grab. Despite initial challenges such as limited infrastructure
and public awareness, the sector gained popularity as internet usage increased. This shift has
impacted the conventional transportation industry, leading some traditional providers to adopt
online platforms to remain competitive. Online transportation applications in Indonesia are
governed by the Regulation of the Minister of Transportation Number 12 of 2019, which focuses
on the safety of motorcycle users employed for public purposes. These applications are not
classified as public transportation but are instead categorized as technology-based platforms
that facilitate the use of motorcycles for community benefits. The regulation defines key
elements such as electronic system operators, application companies, drivers, passengers, and
motorcycles, providing a legal framework for the operation and use of these services. This
framework ensures that the platforms operate within the bounds of the law while prioritizing
user safety.
The Regulation of the Minister of Transportation Number 12 of 2019 outlines safety,
security, comfort, affordability, and regulatory aspects that online transportation companies and
drivers must adhere to. These guidelines emphasize driver health, proper vehicle maintenance,
compliance with traffic rules, and the provision of secure and comfortable services for
passengers. The regulation also includes specific provisions regarding the determination of
service fees, considering factors like vehicle depreciation, fuel costs, and application rental fees,
ensuring that tariffs are fair and non-discriminatory. The regulation is further supported by the
KP 667 of 2022 decree, which addresses the pricing structure of online transportation services in
Indonesia, including the calculation of service fees, upper and lower fare limits, and adjustments
based on market conditions. It also highlights the differences between commission fees and
application fees, which affect drivers' earnings and operational costs. Despite these regulations,
there remains some ambiguity in the exact formula for calculating application fees, leaving room
for further clarification by the Directorate General of Land Relations.
The online transportation market in Indonesia has seen the introduction of different
pricing strategies, including fixed pricing, dynamic pricing, and bidding systems, as exemplified
by the arrival of inDrive. Unlike other platforms that use complex algorithms for fare calculation,
inDrive allows users and drivers to negotiate fares directly, offering flexibility but also raising
concerns about potential market dominance and unfair competition. The competitive nature of
the industry has driven companies to innovate in pricing and services, though the impact of
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bidding systems on market fairness remains a topic of ongoing debate, especially in relation to
existing regulations designed to prevent monopolistic practices.
Determination of Tariffs with a Bidding System on Online Transportation Applications
Based on Competition Law in Indonesia
The presence of tariff wars within the online transportation application industry requires
careful monitoring and scrutiny, as it poses a potential risk of violating the provisions outlined in
Law Number 5 of 1999 concerning the Prohibition of Monopoly Practices and Unfair Business
Competition. Specifically, the Business Competition Law contains two relevant provisions
concerning pricing: Article 7 and Article 20. To determine the appropriate legal framework for
analysis, it is crucial to understand the distinctions between these two articles (Wibawa et al.,
2018).
Article 20 of the Business Competition Law prohibits business actors from supplying goods
or services at a loss or setting prices excessively low with the intent to eliminate or cripple
competitors in the relevant market, which may lead to monopolistic practices and/or unfair
business competition. This article addresses individual conduct by business actors that does not
involve cooperation with other competitors. Conversely, Article 7 prohibits business actors from
entering into agreements with competitors to set prices below market value, which may result in
unfair competition. This article focuses on collaborative actions among competitors.
Considering these legal provisions, the pricing practices employed by online transportation
application businesses are carried out individually rather than in collusion with other business
actors. Therefore, it can be concluded that these activities do not constitute an agreement under
Article 7. Instead, tariff determination activities within the bidding system of online
transportation applications are more appropriately analyzed under Article 20 of the Business
Competition Law. Specifically, the practices may constitute predatory pricing, an aggressive price
competition intended to eliminate competitors, as outlined in the KPPU Guidelines.
The analysis of pricing activities by business actors in the online transportation sector
must be examined through the lens of Law 5/1999, as well as the Regulation of the Ministry of
Transportation. The study focuses on whether the bidding system used in online transportation
apps like inDrive and Gojek constitutes a violation of the law, specifically related to monopoly
practices and unfair competition. The concern is that aggressive price competition, potentially
leading to predatory pricing, could result in monopolistic practices. Law 5/1999 prohibits
business actors from setting prices so low that it eliminates competition. Article 20 of the law is
particularly relevant, as it addresses the issue of selling at a loss to eliminate competitors. The
analysis indicates that pricing activities in the online transportation sector, where business
actors set prices individually rather than in collusion with others, are more likely to fall under
Article 20 rather than Article 7, which deals with cooperative price-setting among competitors.
The study identifies several key elements that need to be fulfilled to prove predatory
pricing under Article 20, including Business Actor Elements, Supply Elements, Goods Elements,
Service Elements, Selling Loss Elements, Very Low Price Elements, With Intentions, Eliminating
or Deadly Elements, Elements Competitors’ Businesses, Market Elements, Relevant Market
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Elements, Monopolistic Practice Elements, and Unfair Business Competition Elements., The
online transportation companies in question, such as inDrive and Gojek, meet the basic
requirements of these elements. However, additional analysis is necessary to determine whether
their pricing strategies, particularly those involving very low prices, fulfill the criteria for
predatory pricing as outlined in the law.
Another critical element is whether these companies set prices with the intent to eliminate
competition. The analysis suggests that the intense competition in the online transportation
market, coupled with aggressive pricing strategies, could be aimed at driving out competitors.
However, the proof of intent requires deeper investigation. The impact of such pricing on
competitors must be assessed to determine if it results in the removal or elimination of rival
businesses from the market. Further economic analysis is needed to determine if the companies
are engaging in monopolistic practices or unfair competition. This involves evaluating whether
one company is gaining a dominant market share through predatory pricing. The analysis also
needs to consider if the pricing strategies result in unfair competition by disadvantaging smaller
competitors who cannot match the low prices offered by larger companies like inDrive and
Gojek.
The Ministry of Transportation's regulations also play a crucial role in this analysis. The
Decree of the Minister of Transportation Number KP 667 of 2022 outlines the guidelines for
calculating service fees in online transportation, including setting lower and upper fare limits.
Tariffs determined by a bidding system must comply with these regulations to ensure fairness
and protect all parties involved. Additionally, pricing and supervision are based on specific zones
as dictated by the decree. For instance, fare prices vary across applications, such as GrabBike,
GoRide, Maxim, and inDrive, with significant differences in the distance and fare calculations. The
regulation outlines guidelines for calculating service fees, including lower and upper limit fares,
to ensure fair competition and protect consumer interests.
The inDrive app demonstrates significant fare differences compared to other apps due to
discrepancies in distance calculations, leading to concerns about compliance and market impact.
While inDrive appears to comply with legal regulations, further investigation is needed to
determine if the lower fares are the result of manipulated distance calculations. However,
discrepancies in distance calculations, as seen in the inDrive app, suggest potential manipulation
of fare prices, which could distort market competition and impact compliance with regulatory
standards. These discrepancies have a substantial effect on market prices and may raise
questions regarding inDrive’s adherence to regulations on safety, security, and efficiency. The
Gojek app with The GoRide Nego option, another service in the online transportation market, has
eliminated application service fees, potentially violating Article 12 of the Ministry of
Transportation Regulation Number 12 of 2019.
The pricing activities of online transportation companies like inDrive and Gojek appear to
potentially violate both the Business Competition Law and Ministry of Transportation
regulations, proving predatory pricing requires a detailed and thorough investigation. . More
research is required to assess whether this constitutes predatory pricing. Both inDrive and
GoRide's practices require further examination to determine if their pricing systems breach legal
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regulations, especially in terms of long-term market impact and predatory pricing concerns. The
study underscores the need for further analysis by the relevant authorities, such as KPPU, to
ensure that the bidding system used in these apps does not lead to monopolistic practices or
unfair competition in the market.
Implementation of Supervision of Tariff Determination Actions with a Bidding System
carried out by the Online Transportation Application based on Applicable Laws and
Regulations
Supervision involves ensuring that activities align with established plans or regulations. In
the context of online transportation applications, supervision is crucial, especially for pricing, to
avoid uncertainty and unfair competition. The supervision covers various aspects, including tariff
setting, coordination, and monitoring service providers, with particular focus on tariff
determination. Online transportation apps, such as inDrive and Gojek, have introduced bidding
systems that offer fare flexibility. However, this has raised concerns about predatory pricing—
selling at a loss to eliminate competitor, an action prohibited under the Business Competition
Law. This scenario necessitates a robust supervision system to prevent market distortions and
ensure fair competition.
KPPU plays a central role in supervising online transportation pricing strategies. As per
Article 30 of the Business Competition Law, KPPU is authorized to investigate, decide on business
competition cases, and impose sanctions on violators. It ensures that no unfair competition
practices, such as predatory pricing, occur. KPPU's preventive supervision aims to prevent
violations before they occur. It includes socialization, advocacy, coordination, and policy
advising.
a. Socialization
Socialization involves educating online transportation companies about business
competition laws, particularly regarding pricing strategies, while advocacy provides them
with the principles of fair competition.
b. Advocacy
KPPU offers advocacy, wherein business actors can consult about business competition
laws. Additionally, KPPU promotes the Business Competition Compliance Program,
encouraging companies, especially dominant ones like inDrive and Gojek, to voluntarily
comply with competition laws. This program, though still in its early stages, is expected to
become more effective in the future..
c. Coordination
d. Coordination between KPPU, the government, and business actors is vital for supervision.
The Ministry of Transportation, as the primary regulator, works closely with KPPU,
especially when there are indications of predatory pricing.
e. Policy Advisor
Intended to offer guidance and recommendations to the government for the formulation of
policies that promote fair business competition. KPPU is authorized to provide
recommendations to the government in the form of proposals to review, repeal, or amend
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specific policies. Additionally, KPPU is empowered to offer guidance and considerations to
business entities, including operators of online transportation applications, concerning
matters related to business competition.
KPPU's repressive supervision takes action to restore the conditions that have been
violated to their original state. Repressive is the authority of the Deputy for Law Enforcement.
Specifically in violation of Article 20 of the Business Competition Law, there are 2 (two)
directorates that function to carry out repressive supervision, namely the Directorate of
Investigation and the Directorate of Enforcement. The repressive tasks carried out by KPPU
include assessing the activities of business actors, in this assessment it is generally carried out
during and after the activities are carried out, with the following supervision process:
a. Evaluation
Supervision in the form of evaluation is aimed at assessing compliance with business
competition regulations. The Indonesian Competition Commission (KPPU) conducts
evaluations both actively and passively. Actively, KPPU, through its Economic or
Investigation Departments, initiates market research on potential violations of Article 20 of
the Business Competition Law. Passively, it responds to reports from the public and
business actors regarding such violations. The outcomes of these evaluations serve as the
basis for determining whether a case should advance to the investigation stage. According
to KPPU, no complaints have been filed regarding the bidding system used by GoRide and
inDrive in relation to Article 20 violations, although tariff war concerns have been raised in
other contexts.
b. Follow-up
This authority is divided into active and passive powers. KPPU's active authority involves
market research, investigations, drawing conclusions, summoning business actors and
witnesses, seeking assistance from law enforcement, requesting information from
government agencies, and imposing administrative sanctions. Its passive authority is
triggered by reports from the public or business actors concerning monopolistic practices
or unfair competition. After investigating alleged violations of Article 20 of the Business
Competition Law, KPPU may summon business actors, witnesses, and experts to gather
further evidence, including economic and communication evidence. KPPU’s oversight
process includes coordination with the Ministry of Transportation and relevant authorities,
using a rule of reason approach to evaluate compliance.
c. Penalty
Sanctions imposed KPPU are a repressive measure aimed at restoring fair market
conditions and enforcing business competition law. When business actors are proven to
have violated Article 20 of the Business Competition Law, KPPU, under Article 47, can take
administrative actions. These actions may include orders to cease activities that result in
monopolistic practices, unfair competition, or harm to the public, as well as the
determination of compensation payments. KPPU may also impose fines ranging from Rp
1,000,000,000.00 (one billion rupiah) to Rp 25,000,000,000.00 (twenty-five billion rupiah).
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The supervision of online transportation applications falls under the jurisdiction of the
Ministry of Transportation, both at the central and regional levels, as stipulated in Article 19 of
the Regulation of the Minister of Transportation Number 12 of 2019 concerning the Protection of
the Safety of Motorcycle Users for the Benefit of the Community. This regulation mandates that
both central and regional governments oversee the use of motorcycles for public services. The
Ministry of Transportation, particularly the Minister, is responsible for publicizing the formula
and guidelines for calculating service fees, as outlined in Article 13 of the same regulation. The
Minister's duties regarding the supervision of tariff determination are further clarified in Article
11 of the Regulation, which calls for the creation of derivative rules in the form of Guidelines for
the Calculation of Service Fees.
Consequently, the Ministry issued the guideline KP 667 of 2022, which defines the roles of
the Director General of Land Transportation, the Head of the Jabodetabek Transportation
Management Agency, and regional authorities (governors, regents, or mayors) in supervising
tariff-setting activities for online transportation applications. The primary focus of this
supervision is on business actors that implement tariff determination using a bidding system.
Currently, the inDrive application with its bidding system and Gojek's GoRide Nego service are
subject to this oversight, ensuring their tariff-setting practices comply with the established
regulations. These authorities are tasked with ensuring that these platforms adhere to the
guidelines set forth in the relevant legal frameworks.
In terms of preventive oversight, the supervision by the Directorate General of Land
Transportation, specifically conducted through the Directorate of Road Transportation in
coordination with the Collection and Reporting Section, is responsible for coordinating,
synchronizing, and controlling policies related to the preparation of plans, analysis, and the
determination of levies in the transportation sector
a. Socialization
Supervision in the form of socialization aims to ensure that relevant information and
regulations are effectively communicated to online transportation application business
actors. The Ministry of Transportation must regularly and comprehensively disseminate
the Regulation of the Minister of Transportation Number 12 of 2019 concerning the
Protection of the Safety of Motorcycle Users Used for the Benefit of the Community, as
required under Article 13. The Directorate General of Land Transportation is specifically
tasked with socializing policies regarding the Guidelines for Calculating Service Fees,
taking into account the zone-specific service fee calculation as outlined in the Decree of the
Minister of Transportation Number KP 667 of 2022 in conjunction with KP 1001 of 2022.
Socialization efforts must extend beyond the central government and reach each region.
This is necessary because service fee rates are divided into three zones, and each region
needs to be informed about the corresponding tariff for its zone. The Directorate General of
Land Transportation, with the assistance of governors, regents, or mayors, is responsible
for ensuring that regional socialization is conducted, ensuring that all regions are aware of
their specific service fee rates. Regional heads are authorized to issue decrees to
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implement and supervise the service fee tariffs for motorcycle use in their respective areas,
based on the zone division. These decrees serve to enforce the provisions of the Decree of
the Minister of Transportation Number KP 1001 of 2022 within each region.
b. Coordination
Supervision in the form of coordination is actively conducted by the Ministry of
Transportation through direct collaboration with the Business Competition Supervisory
Commission (KPPU). This coordination aims to streamline monitoring of the tariff
determination process and facilitate early mitigation efforts when indications of violations
arise. The Ministry of Transportation and KPPU work together to ensure that the tariff-
setting practices of business actors, such as inDrive and GoRide Nego, do not violate
business competition laws, particularly regarding predatory pricing. The tariff-setting
activities by these business actors have shown potential indications of predatory pricing,
which could breach Article 20 of the Business Competition Law. The Ministry of
Transportation coordinates with KPPU to initiate actions against these alleged violations
before they become formal breaches of the law. The collaboration includes comparing
service tariffs set by online transportation companies operating under a bidding system
with the regulatory minimum tariff rates for each zone. If tariffs are set below the
minimum threshold, the Ministry of Transportation is obligated to report this to KPPU. In
cases where violations are suspected, the Ministry of Transportation can actively
participate in KPPU's case handling process, providing reports, evidence, and testimony as
necessary. This ensures that both agencies work together effectively to uphold fair
competition and compliance with regulations.
c. Compliance
Supervision of compliance is intended to evaluate reports submitted by online
transportation business actors regarding their tariff determination activities. Under this
supervision, the primary obligation of business actors is to provide the Directorate General
of Land Transportation with an evaluation of their performance in implementing tariffs. In
addition to internal supervision, the oversight of the performance evaluations of online
transportation companies also involves external supervision. According to Dictum 8A letter
d of the Decree of the Minister of Transportation Number KP 1001 of 2022, the annual
financial statements of these business actors must be audited by a public accounting firm
ranked within the top five. This requirement ensures that the Ministry of Transportation
incorporates external audits as part of the supervisory process for tariff determination
activities, adding an additional layer of oversight to ensure compliance with regulations.
Repressive supervision, the Ministry of Transportation takes action to restore the
conditions that have been violated to their original state.
a. Follow-up
The Ministry of Transportation conducts follow-up actions on online transportation
application business actors by periodically monitoring the tariffs implemented by these
platforms. This oversight is based on reports from the public, drivers, performance
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evaluations of the applicators, and data analysis obtained from the respective online
transportation platforms. Following the reporting, further supervision ensures compliance
with applicable regulations by the online transportation business actors.
b. Examination
The Directorate General of Land Transportation conducts a comprehensive and
transparent inspection process that includes surveys, analysis of operational costs, market
conditions, and driver income. Discussions and consultations are held with various
stakeholders, including driver representatives, online transportation companies, and
consumer organizations, to ensure that the tariff determination by these companies
complies with existing regulations. This process is guided by findings and reports from the
public, as well as performance reports from the applicators, which contain data on daily
operations, passenger numbers, and driver income. Inspections are initiated based on
reports from various sources, including public complaints regarding unreasonable tariffs
or service issues under Article 3(2) of the Regulation of the Minister of Transportation
Number 12 of 2019. The Directorate General then conducts field verification, holds
meetings with relevant parties, and performs direct surveys with drivers and users to
ensure the accuracy of the reported data. Periodic evaluations are also conducted to adjust
tariffs in response to significant changes in operational costs or market conditions. If a
business actor is found to have violated the provisions of the Decree of the Minister of
Transportation Number KP 667 of 2022, the Directorate General of Land Transportation
may take appropriate actions within the scope of its authority.
c. Penalty
Administrative sanctions in this context are classified as repressive supervisory measures
that can be enforced by the Directorate General of Land Transportation. Online
transportation application business actors who fail to comply with reporting obligations or
experience delays in submission may be subject to administrative sanctions imposed by
the Directorate General. These sanctions may include fines, suspension of operating
licenses, or other legal actions as outlined in applicable regulations. However, to date, no
formal written sanctions have been issued for non-compliance in reporting by online
transportation application companies. This lack of enforcement has led to legal uncertainty
and the perception of leniency towards business actors who violate compliance
regulations.
4. Conclusion
The act of determining tariffs carried out by online transportation business actors using a
bidding system has the potential to violate the provisions of Article 20 of the Business Competition
Law regarding the prohibition of predatory pricing and the Decree of the Minister of Transportation
Number KP 667 of 2022 jo. Decree of the Minister of Transportation Number KP 1001 of 2022
concerning Guidelines for the Calculation of Service Fees for the Use of Motorcycles It is carried out
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with a application and Regulation of the Minister of Transportation Number 12 of 2019 concerning
the Protection of the Safety of Motorcycle Users Used for the Benefit of the Community. Supervision
of the actions of online transportation business actors in setting prices with a bidding system is
carried out by 2 (two) institutions, namely KPPU and the Ministry of Transportation, both
preventively and repressively.
Suggestions that can be given to the current regulations regarding the method of determining
tariffs in the online transportation application environment are that it is hoped that the Government
will develop a regulation that accommodates the setting of fares with a bidding system. This is
necessary to prevent similar violations in fare setting. Additionally, for the Ministry of
Transportation, it is recommended to create technical rules regarding the determination of
sanctions and the amount of fines for online transportation application business actors who violate
the established tariffs, thereby ensuring compliance and fairness in the industry.
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