Jakarta greenlights Uber operations

By Money Times

Dec 10, 2015 10:05 AM EST

Uber Technologies Inc. said it had been given approval from Jakarta governor to operate as a fully legal entity in the Indonesian capital, assuming it meets local tax rules and other requirements laid out by the government.

Uber said in a blog post that Indonesian Investment Coordinating Board has approved Uber's foreign investment application. Uber  held a meeting in Monday with Jakarta Governor Basuki Tjahaja Purnama, who is known by his nickname Ahok, that fully recognizes Uber's legality and value.

At the meeting, the Governor mentioned that ridesharing technologies like Uber will bring benefits to the transportation ecosystem.

Governor Ahok said that the main reason of Uber operations in Jakarta is based on huge public demand for safe, reliable, and affordable means transportations.

He said that Uber has received positive and tremendous response from users of its ability to provide the three means of transportation through the technology platform.

On the other hand, Uber sees Jakarta as an important city offering big opportunities, according to Venture Beat. Indonesia, which is populated by around 250 million people is the biggest market in Asia, after India and China.

Uber has already been operating in Jakarta while the government considered over the regulations. The company said it is not making a profit in the country while operating in a legal grey area.

It encountered legality problem last month when local police seized a dozen vehicles belonging to Uber drivers.

Uber's service was banned in the country a year ago as the company was alleged to fail to hold necessary permits and pay taxes. Earlier this year, five Uber drivers were detained by Jakarta local police over permit issues.

The local police said that Uber drivers did not pay the correct taxes and the company did not have the license to operate as a form of public transport.

In order to operate legitimately in Jakarta, Uber is now required to have a legal entity for a foreign investor in Indonesia. It also needs to pay tax, offer adequate insurance and ensure the partner vehicles undergo regular vehicle inspection.

Governor Ahok has requested the country's transportation officials to accommodate and work with Uber to develop a transparent process to conduct vehicle inspections and verify insurance.

According to Reuters, Uber's spokesman Karun Arya said in an email Governor Ahok has now provided clear direction for Uber in terms of specific requirements for Uber and other ridesharing platforms to operate and thrive in Jakarta while previously there was tremendous regulatory ambiguity.

Uber, that plans to expand to more cities in South East Asia and boost the number of its drivers to 100,000 by 2017, currently operates in large cities in Indonesia including Jakarta, Bandung, and Bali.

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