The online motorcycle taxi industry has become an integral part of urban life in Indonesia. This phenomenon is not only changing the way people move but also creating millions of new job opportunities in a country with a large population and urgent transportation needs. However, behind the success demonstrated by these technology companies, there is a narrative that is often forgotten or not clearly revealed, namely the working relationship that underlies the “partnership” between the company and online motorcycle taxi drivers.
With the emergence of smartphone applications that connect users with motorcycle taxi drivers, the industry has experienced a spectacular growth spurt in the last decade. Companies like Gojek, Grab, and a number of other competitors have expanded the scope of their services from just transportation to delivery of goods, financial services, and more. This business model, known as the platform economy or on-demand economy, is not only changing the way people travel but also creating substantial economic opportunities throughout Indonesia.
Officially, online motorcycle taxi companies describe their relationship with drivers as a partnership. They often refer to drivers as “partners,” a term that creates the impression of equal, mutually beneficial cooperation. However, behind this rhetoric, the reality of drivers’ daily work often reveals more complex and sometimes unbalanced dynamics. Meanwhile, in the understanding of employment, legal relations between meteka have fulfilled the minimum elements in an employment relationship, namely that someone orders; there are work objects that are carried out on the basis of orders (via the application) and there are wages (the amount of which also automatically appears in the application). Problems may arise if the legal relationship which is currently perceived as a partnership relationship then brings up the fact that there is an employment relationship which of course is related to fulfilling the rights and obligations of the parties which must comply with the dictates of employment law.
One of the main challenges faced by online motorcycle taxi drivers is economic uncertainty. Despite being considered partners, drivers often don’t have the same freedom as independent workers in setting their own rates. Instead, rates and incentives are often set by complex corporate algorithms, which can change prices dynamically based on supply and demand in the market.
This uncertainty is compounded by the lack of guaranteed steady income or social protection provided to drivers. They do not have access to health insurance or pension coverage, which are standard benefits for formal workers in many countries. In some cases, drivers also have to cover their own operational costs, including vehicle maintenance and fuel costs, without significant financial support from the company.
While these challenges exist, many drivers find value in the flexibility this work model offers. They can customize their own working hours, choosing to work part-time or full-time according to their personal needs and preferences. This flexibility allows drivers to address their personal life challenges, such as child care or other family needs, while still earning an income.
In facing these dynamics, it is important to find the right balance between economic innovation and social protection for workers. Appropriate regulations can help ensure that online motorcycle taxi drivers receive the protection they deserve without hindering industry innovation or company growth. For example, governments could consider imposing minimum standards for worker protections, such as health insurance or social security, necessary to protect drivers from unexpected economic risks.
In addition, the online motorcycle taxi industry has also played a role in reducing unemployment rates in several areas, especially in large cities where formal employment opportunities may be scarce. They provide an opportunity to create additional income for people in need, especially among young people looking for their first job or trying to gain work experience.
Since 2015, the issue of the legal relationship status of online motorcycle taxi partnerships is still ongoing. Indonesia is very far behind by several countries which have provided clear status, namely as laborers/employees who are obliged to have their rights according to the provisions in their respective countries. For example, England and the Netherlands, where the two countries have provided a relationship status that has certainty, justice and legal benefits for the parties.
In the Netherlands, as in many European countries, platform workers including online motorcycle taxi drivers have been actively fighting for better legal recognition and protection. In 2021, a court in the Netherlands ruled that Deliveroo drivers were actually employees and not “independent entrepreneurs” as the company claimed. This ruling highlights the conflict between claims of partnership and the reality of more traditional employment relationships.
Platform drivers in the Netherlands have faced similar problems to their counterparts around the world, including economic uncertainty and lack of access to adequate social protection. Labor organizations and unions have been the main driving force behind these efforts, emphasizing the importance of recognizing basic workers’ rights in the digital era.
In recent years, the UK has also been in the international spotlight in the debate around platform worker rights. During the COVID-19 pandemic, there has been a surge in the use of online food delivery services and motorcycle taxis, highlighting the importance of protecting the health and safety of drivers. The UK government has taken steps to strengthen relevant regulations, including securing access to COVID-19 vaccines for platform workers.
However, many issues remain unresolved, including ongoing legal uncertainty surrounding the employment status of drivers and the rights they have. Courts in the UK have also considered claims from drivers seeking recognition as employees with appropriate rights, such as access to sick leave and guaranteed minimum wages.
The cases in the Netherlands and the UK provide valuable insight into the dynamics that lie behind the “partnership” label in platform employment relationships. In the Netherlands, a court ruling underscores the need for a better understanding of actual employment relationships in the digital age, where algorithmic decisions and corporate control often shape the work environment more than collective negotiations or individual agreements. In the UK, the protection of platform workers has become a key concern in the context of the global pandemic, with particular emphasis on occupational health and safety.
The stance taken by these two countries changed the direction of legal thinking, especially in international labor law. In Indonesia, many people criticized this problem considering that Indonesia is one of the largest markets for online motorcycle taxi partnerships. Databok and DataIndo share the results of a 2023 survey regarding the market for online motorcycle taxi users in Indonesia. 82% of respondents used Gojek services, then 57.3% of respondents used Grab services, 19.6% of respondents used Maxim services, 28% of respondents used Shopee, and at least 4.9% of respondents used InDrive.
This figure represents the size of the Indonesian online motorcycle taxi market. Databoks also released that in 2022, Gojek will have around 2.7 million registered driver partners, including GoRide, GoCar drivers, as well as GoFood, GoMart, GoSend couriers and other services on the Gojek application. The 2.7 million partners who depend on online motorcycle taxis for their living should be a big concern for the Indonesian government.
Amendments to Law Number 13 of 2003 concerning Employment to Law Number 6 of 2023 establishing Government Regulations in Lieu of Law Number 2 of 2022 concerning Job Creation into Law, there has not yet been found a special chapter that regulates online motorcycle taxi partnerships, in fact Derivative regulations have not yet been issued by the Indonesian government.
The Indonesian government has faced sharp criticism over how it has responded to partnership issues in the online motorcycle taxi industry, which has become an integral part of the country’s sharing economy. The main issue is protecting the rights and welfare of online motorcycle taxi drivers, which is often considered to be given minimal attention by the government. The inability to establish clear and effective regulations to protect drivers is clear evidence of the lack of a decisive response.
When issues such as unstable fares and reduced incentives for drivers arise, governments are often slow to respond. In fact, ensuring fair rates and incentives is very important for drivers as the main support for the online motorcycle taxi ecosystem. The lack of harmony between central and regional government policies in terms of online motorcycle taxi regulations also makes things difficult for drivers, because they have to deal with different regulations in each region. Apart from that, protection of driver safety and security is also often neglected. Online motorcycle taxi drivers are vulnerable to security threats such as physical violence, robbery and intimidation. However, the government’s response to strengthen security and enforce the law against perpetrators of crimes against drivers is still considered inadequate.
Criticism also points to the lack of training and skills development programs for online motorcycle taxi drivers. Despite being self-employed, drivers require training to improve their skills in driving, time management and customer service. The government should take an active role in providing access to this training to support drivers to compete better and improve the quality of service. The demand to increase social protection for online motorcycle taxi drivers, such as health insurance and labor protection, has also not received an adequate response from the government. This social protection is very important considering that online motorcycle taxi drivers often do not have social security or benefits equivalent to other formal workers.
The government was also criticized for the lack of inclusive dialogue and consultation with stakeholders, including online motorcycle taxi companies and labor unions, in formulating policies related to this industry. It is hoped that more active and transparent involvement can produce policies that are more balanced and fair for all parties involved. Another challenge is that regulations tend to change and be inconsistent, which can create uncertainty for drivers and online motorcycle taxi companies. There is a need for clear and predictable policies to create a stable and sustainable business environment for all parties involved in the online motorcycle taxi industry in Indonesia.
The status of the partnership relationship between online motorcycle taxi companies and drivers is a sensitive issue that has not received adequate handling from the Indonesian government. The lack of clarity regarding whether the driver is a partner or employee of the company creates legal uncertainty that is detrimental to all parties involved. This has the potential to result in gaps in legal and social protection for online motorcycle taxi drivers.
Online motorcycle taxi drivers often do not get the social benefits and job security that should be given to permanent employees. They do not get protection against work accidents, sick leave, or retirement benefits which are the rights of permanent workers. This lack of clarity on status also affects drivers’ ability to access credit or other financial services that are important for their economic survival. The government’s inability to establish clear regulations regarding the status of this relationship reflects a lack of responsiveness to the dynamics of the sharing economy in the digital era. In a global context, other countries have developed more detailed regulations to protect drivers’ rights and ensure fairness in these business partnerships.
Indecisiveness in responding to the issue of the status of this partnership relationship could also endanger Indonesia’s reputation as a stable investment environment. Foreign investors pay attention to consistent and fair legal protection when considering investing their capital in a country. A lack of clarity in regulations can hinder foreign investment that can support economic growth and job creation.
Writer:Fithriatus Shalihah (Faculty Of Law Ahmad Dahlan University)
