Indonesia's New Regulation for Online Drivers Partially Addresses Welfare Concerns

The recent issuance of Presidential Regulation (Perpres) No. 27 of 2026 marks a significant step for Indonesia's online transportation sector, finally acknowledging the crucial role of millions of ride-hailing workers. As researchers at IDEAS, we view this as a vital recognition that these individuals are more than just 'app partners'; they are integral to the nation's digital economy. This regulation, the twelfth concerning ride-hailing, holds a stronger legal standing than previous ministerial decrees, signaling a more robust governmental approach.

However, our immediate concern is the lack of public access to the official text of Perpres 27/2026. This opacity prevents thorough analysis by researchers, driver unions, and civil society, hindering a deep understanding of the policy's substance. Based on preliminary government statements, the regulation appears to touch upon only a fraction of the International Labour Organization's (ILO) 'decent work' principles. While it addresses fair pay and working conditions, albeit partially, critical aspects like fair contracts, participatory work management, and worker representation remain inadequately covered.

The ride-hailing industry in Indonesia has experienced explosive growth, attracting substantial investment and building significant valuations. Yet, this boom has often occurred at the expense of driver welfare. Our recent IDEAS survey in December 2025, covering 1,018 online motorcycle taxi drivers across 62 regencies/cities, highlighted this disparity. With a standard 20 percent app commission, drivers' average gross daily earnings were Rp126,313, translating to approximately Rp3.15 million per month – a figure that barely reflects the full cost and risk borne by the drivers.

The fundamental issue lies within the platform's economic structure. Drivers provide the primary infrastructure – their vehicles, fuel, internet data, and maintenance costs – while shouldering the majority of the risks, including accidents and health issues. This Perpres, while a welcome acknowledgment, must be rigorously implemented and expanded to truly ensure fair compensation, equitable working conditions, and genuine worker representation. From an Indonesian perspective, ensuring the welfare of these gig economy workers is not just an economic imperative but a matter of social justice, reflecting our commitment to inclusive growth.