The Indonesian government has mandated that ride-hailing app companies must cap commission fees at maximum of 20% of each trip’s fare.

This announcement follows protests by thousands of online motorcycle taxi drivers on May 20, 2025, who raised concerns about excessive deductions affecting their earnings.

Minister of Transportation Dudy Purwagandhi said that the regulation, detailed in Ministerial Decree No. KP 1001 of 2022, prohibits companies from charging more than 20% in commissions.

However, some drivers have reported commission rates as high as 30% to 50%, which significantly reduces their take-home income.

In response, The Ministry of Transportation has engaged with four major ride-hailing app operators—GoTo Gojek Tokopedia, Grab Indonesia, inDrive Indonesia, and Maxim Indonesia—to address these issues.

Additionally, the Ministry plans to review the commission structure to evaluate its broader impact on the online transportation sector.

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🔗 Source: Kompas

🧠 Food for thought

1️⃣ Indonesia’s gig workers overcoming historical union suppression

The May 2025 protests signify a remarkable shift in Indonesia’s labor landscape, where gig workers are organizing at unprecedented scale despite historical barriers to unionization.

Organizations like Garda Indonesia, now representing 400,000 members, demonstrate how digital platforms have enabled collective action among workers who were previously disconnected from traditional labor movements 1.

This organizing has emerged despite Indonesia’s history of authoritarian regimes creating stigma around collective labor action, with past government suppression making union formation particularly challenging 1.

The planned “Grand Action 2025” mobilizing approximately 500,000 drivers across multiple regions shows how ride-hailing drivers have effectively utilized social media and communication tools to coordinate large-scale demonstrations 2.

These protests reflect a broader global pattern of gig workers challenging their classification as independent contractors while demanding fundamental employment protections, with Indonesia’s movement potentially serving as a model for labor organizing in digital economies worldwide 1.

2️⃣ The widening gap between regulation and enforcement in platform economies

Despite Indonesia’s transportation ministry establishing a clear 20% cap on commissions in 2022, drivers report routinely facing deductions of 30% to 50% from ride-hailing platforms, highlighting profound challenges in regulatory enforcement 2.

The significant discrepancy between regulated rates and actual practice demonstrates how traditional regulatory frameworks struggle to effectively govern digital platforms that can modify fee structures through complex algorithms and incentive systems 3.

This enforcement gap has created severe economic consequences for drivers, with many reporting earning just 150,000 rupiah ($10) daily—insufficient for basic living expenses in Indonesia’s major cities amid rising costs of living 4.

The protests reflect drivers’ frustration with what they perceive as regulatory abandonment, as many have shifted from demanding better working conditions to simply calling for enforcement of existing rules meant to protect their livelihoods 5.

The Ministry of Transportation’s commitment to “review” commission structures following the protests reveals how government agencies are being forced to continuously adapt their approach to regulating rapidly evolving digital platforms 2.

3️⃣ The fundamental economic tension in ride-hailing business models

The conflict over commission rates exposes the inherent contradiction in ride-hailing economics: platforms need substantial revenue to achieve profitability while drivers require sufficient earnings to sustain their livelihoods 4.

While platforms like Gojek and Grab defend their commission structures as necessary for maintaining service quality and funding driver support initiatives, union leaders emphasize that drivers face dangerous working conditions while struggling to earn living wages 5.

This tension is amplified by discount fare programs that platforms use to attract customers but further compress driver earnings, creating a business model where driver compensation becomes the primary variable cost to adjust when seeking profitability 4.

The protesters’ specific demand for a 10% commission cap (half of the current regulatory limit) reflects drivers’ calculations about what constitutes sustainable earnings given operational costs like fuel, vehicle maintenance, and smartphone data plans 5.

The scale of the protests—with hundreds of thousands of participants willing to sacrifice daily income to demonstrate—highlights the severity of economic pressure on drivers and suggests the current balance in Indonesia’s ride-hailing ecosystem may be unsustainable 2.

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