Govt announced a policy to ban fierce discounts of the online taxi would be set at the end of June 2019

News24xx.com -  Land Transport Director-General of Transportation Ministry, Budi Setiyadi, announced a policy to ban fierce discounts of the online taxi would be set at the end of June 2019.

“Yes, [the draft] perhaps requires harmonization, one until two weeks ahead. It’ll be completed at the end of June, and I’ll later present it,” said Budi in the ministry office, Jakarta, Monday, June 10.

Budi explained the regulation was in line with the view of Minister Budi Karya Sumadi who prohibited discounts in the online taxi as it often led to a tariff war.

Budi mentioned communication on the plan with the Business Competition Supervisory Commission (KPPU) had been established, in which they talked of the possibility of predatory pricing in the practice.

“Because that’s a business competition and it will eliminate other [competitors]. [The KPPU] can decide whether [the discount strategy] is killing its competitors or not, if it leads to that, KPPU will summon them (online ride-hailing companies),” Budi underlined.

Based on his observation, Budi saw tariff discounts of the online taxi was not provided by the applicator but partner companies such as electronic transactions provider or fintech.

Therefore, the matter required a thorough study. “We will concentrate on this issue this week.”