TEMPO.CO, Jakarta - The Business Competition Supervisory Commission (KPPU) has submitted a letter to President Joko Widodo, also known as Jokowi, asking him to review the newly revised Transportation Minister Regulation No. 32/2016.

The commission considers the new regulation on price limitations for public transport and quota for both conventional and app-based taxis are against the government's efforts to slash transportation and logistics costs.

"We oppose the new regulation," KPPU chairman Syarkawi Rauf told Tempo in a phone interview last week. "By setting the price floor, fares will get higher, it will burden the people," Syarkawi stated.

Syarkawi added that the decision is tantamount to making consumers cover for the inefficiency of transportation service operators.

The Transportation Ministry has revised the Regulation No. 32/2016. It expects the regulation to come into effect in early April 2017.

The revisions were made to accommodate app-based transportation services. There are 11 points of regulation on app-based transportation service, namely type of rental vehicles, cylinder capacity, fare limit, quota, vehicle registration certificate, periodic tests, taxi stand, workshops, taxes, monitoring access and sanctions.

The minimum and maximum limit for app-based taxi tariffs will be set to avoid unhealthy competition between public transport providers. The government argued that tariff setting will level the playing field for business owners and provide certainty to passengers.

Syarkawi however, does not agree. "It will instead create unhealthy competition, even more so because the government has not set service standards in the sector," Syarkawi explained.

Syarkawi added that the government should focus on standardization of rental transport services outside the designated routes instead of setting the tariffs.

Syarkawi said that minimum service standards will ensure consumer safety and comfort.

"Price limitation is a disadvantage to business owners and will weaken the ability to innovate," Syarkawi argued.

On the other hand, the KPPU will investigate into alleged predatory pricing policy of app-based taxi service providers.

"We will take a closer look the pricing strategy applicable in online-based transportation [services], how business owners able to set a very low price," Syarkawi said.

PRAGA UTAMA