Indonesia gig workers could see major benefits as ride-hailing regulations near completion

Millions of Indonesian ride-hailing drivers and couriers could soon receive significant financial and social protections under a draft presidential decree expected in the first quarter of 2026, as the government seeks to formalize working conditions in the country’s fast-growing gig economy.

State Secretary Prasetyo Hadi said the administration is working to reconcile differences among stakeholders to release the regulation swiftly. “Our hope is that we can soon reach the best compromise,” Prasetyo told reporters. “Can it be released in the first quarter? That’s our expectation.”

The draft decree is designed to create a fairer ecosystem for app-based transportation and logistics, sectors that have become a major source of income for millions of Indonesians. 

It would standardize fares, cap platform commission fees, expand insurance coverage, and clarify the partnership relationship between drivers and platform companies. 

Under the draft, commissions taken by ride-hailing platforms would be reduced to 10% from the current 20%, while companies would be required to cover accident and death insurance for drivers. 

Industry insiders warn that some platforms may struggle to sustain the new costs, potentially affecting profitability and driver onboarding.

Driver groups have welcomed the draft but called on authorities to ensure that benefits, including insurance, are implemented without additional conditions. 

“It must be ensured that the percentage received by workers is based on the total amount paid by consumers to the platform,” said Lily Pujiati, head of the Indonesian Transport Workers Union.

The push comes amid growing political pressure. Gig workers have emerged as a visible force in Indonesia, staging protests over commission rates and rights, and drawing public attention to vulnerabilities in the sector. The death of a motorcycle taxi driver during demonstrations last August intensified scrutiny of worker conditions and accelerated government action. Prasetyo Hadi has referred to motorcycle taxi drivers as “heroes of the economy.”

Estimates suggest that Indonesia’s ride-hailing workforce numbers between 2 million and 7 million, depending on whether couriers are included. 

Many drivers operate without formal employment contracts or social protections, earning daily incomes that have declined sharply since the pandemic. A 2023 survey by the Institute for Demographic and Poverty Studies found average daily earnings fell from Rp 304,688 ($19) pre-pandemic to around Rp 175,000 ($11) in 2022–2023, with some working up to 11 hours a day.

Legally, ride-hailing has long operated in a grey area. Motorcycles are not classified as public transport under Indonesia’s 2009 Traffic and Road Transport Law, and the sector has been governed only by a 2019 ministerial regulation. The upcoming presidential decree is expected to close this legal gap, offering drivers greater protection while formalizing the industry.

Beyond ride-hailing, the regulation would also extend to on-demand logistics providers such as Hong Kong-based Lalamove and J&T Express, bringing broader gig economy services under the same legal framework.

For millions of Indonesian gig workers, the decree represents a potential turning point, balancing stronger protections with operational sustainability for platforms, and reflecting the growing political and economic clout of the sector.