Indonesia redraws gig economy rules with 8% cap on ride-hailing commissions

Indonesia has unveiled one of the world’s most aggressive interventions into the gig economy, capping ride-hailing platform commissions at 8% and guaranteeing drivers at least 92% of customer fares under a sweeping new regulation signed by President Prabowo Subianto.

The measure, formalised through Presidential Regulation No. 27/2026, marks a significant shift in how Southeast Asia’s largest digital mobility market will operate. Announced during International Workers’ Day celebrations in Jakarta, the policy introduces mandatory protections for app-based drivers, including workplace accident insurance and access to public healthcare.

The regulation sharply reduces the share retained by ride-hailing platforms, replacing the industry’s widely used 80:20 fare split with a new structure that leaves companies with no more than 8% commission on fares.

The move places Indonesia among the most interventionist governments globally in regulating platform work, directly challenging the economics of ride-hailing and delivery businesses that have relied heavily on commissions, subsidies, and incentives to drive growth.

Indonesia’s dominant super-app operators, GoTo Group and Grab, responded cautiously as they began assessing the implications for their businesses.

Hans Patuwo confirmed the company would comply with the directive while reviewing operational adjustments required under the new rules.

“We are currently conducting a review to understand the details, implications, and necessary adjustments in accordance with the regulation,” Patuwo said.

Meanwhile, Neneng Goenadi described the policy as a major shift in marketplace dynamics.

“This proposed commission structure represents a fundamental change to how digital platforms operate as marketplaces. We will collaborate with the government and relevant stakeholders to work towards implementing these changes, ensuring the policy achieves its objective of protecting driver-partners, while maintaining affordability for consumers and the sustainability of the industry,” she said.

Maxim Indonesia also raised concerns, arguing that its current 15% commission structure already balances driver earnings with consumer affordability. Development director Dirhamsyah warned that the new cap could threaten long-term industry sustainability if implemented without deeper evaluation across differing platform models.

The financial implications for platforms could be substantial.

Under existing structures, ride-hailing firms commonly retain around 20% of base fares. The new 8% ceiling effectively cuts that share by more than half, compressing platform revenues and potentially limiting their ability to fund promotions, subsidise rides, or maintain aggressive driver incentive schemes that have fuelled competition across Indonesia’s digital economy.

Analysts say the policy may force companies to rethink pricing strategies, reduce discounts for consumers, and prioritise retention over rapid customer acquisition.

The Indonesia Digital Mobility and Delivery Industry Association, also known as MODANTARA, warned that the regulation could create widespread disruption if implemented without broader consultation.

Executive director Agung Yudha said the 8% cap could significantly limit platforms’ operational flexibility.

“The 8% cap may sound simple, but its impact could be very broad, potentially reducing the platform’s capacity to maintain service quality, incentives and safety,” Yudha said.

He added that the changes could reduce operational headroom by as much as 60%, potentially forcing rapid restructuring across the sector.

“Revenue sharing or platform commissions cannot be standardised like parking fees. The question is whether the 8% cap will truly strengthen partners’ earnings in the long term, or instead reduce demand, services, and the flexible work opportunities that have sustained them.”

Globally, most ride-hailing companies operate with commission structures ranging between 15% and 30%, making Indonesia’s new threshold among the lowest worldwide and potentially reshaping investor perceptions of the country’s gig economy sector.

The regulation follows months of mounting political pressure and labour activism surrounding the treatment of app-based workers.

Earlier this year, the Indonesian government had already signalled plans to formalise protections for millions of drivers and couriers through a draft presidential decree aimed at standardising fares, limiting commissions, expanding insurance coverage, and clarifying the legal relationship between drivers and platforms.

State Secretary Prasetyo Hadi had said the government was working to reconcile differences among stakeholders while accelerating the regulation’s release.

The new framework also grants the government greater authority to review agreements between platforms and drivers while protecting workers’ rights to unionise.

Driver advocacy groups have welcomed the changes but stressed that benefits must be implemented transparently and without additional conditions.

Lily Pujiati, who leads the Indonesian Transport Workers Union, said the government must ensure workers receive a fair share of total customer payments. “It must be ensured that the percentage received by workers is based on the total amount paid by consumers to the platform,” she said.

The reforms come as Indonesia’s ride-hailing workforce continues to grow rapidly. Estimates suggest between two million and seven million Indonesians now work in app-based transport and delivery services, many without formal contracts or social protections.

A 2023 survey by the Institute for Demographic and Poverty Studies found average driver earnings had fallen sharply since the pandemic, declining from Rp304,688 (US$19) per day before COVID-19 to roughly Rp175,000 (US$11) in 2022 and 2023, despite many drivers working up to 11 hours daily.

The regulation also seeks to close a longstanding legal loophole in Indonesia’s transport sector. Motorcycle ride-hailing services have historically operated in a regulatory grey area because motorcycles are not formally classified as public transportation under Indonesia’s 2009 Traffic and Road Transport Law.

Beyond passenger transport, the decree extends to on-demand logistics operators including Lalamove and J&T Express, bringing broader gig economy services under a unified labour framework.

For millions of Indonesian gig workers, the regulation could represent a turning point, strengthening social protections and bargaining power while testing whether platform businesses can remain sustainable under tighter government oversight.