KUALA LUMPUR - Millions of ride-hailing drivers in Indonesia could receive higher pay protection and wider social benefits under a draft presidential decree being reviewed by President Prabowo Subianto, the Reuters reports.

The proposed changes could significantly affect the profits of ride-hailing companies operating in Southeast Asia’s largest market.

President Prabowo is facing pressure to respond to drivers’ demands for better wages and working conditions, especially after their involvement in large student-led protests in August highlighted their growing political influence.

The issue has gained urgency amid concerns over driver welfare linked to a possible merger between Indonesia’s GoTo and Singapore-based Grab, which critics warn could create a monopoly that harms drivers.

Details of the draft decree, seen by Reuters, have not previously been reported, and it remains unclear whether it is final or when it may take effect.

Under the proposal, commission caps charged by ride-hailing platforms would be cut to 10% from the current 20%.

Indonesia is currently the only Southeast Asian country that limits commissions for two wheel ride-hailing services, and the tighter cap would further squeeze company margins.

The draft also requires platforms to fully cover accident and death insurance for drivers, costing firms about USD1 per month for each of the estimated seven million delivery drivers nationwide.

In addition, companies would have to share the cost of health, old-age, and pension contributions, increasing overall operating and hiring expenses.

“Most of the players in the industry cannot sustain these changes,” an industry source, who has seen the draft, told Reuters, citing concerns over sharply rising insurance costs.

A second source warned that higher premiums paid by platforms could reduce profit margins and limit the number of drivers allowed to operate on their platforms.

Ride-hailing companies have long resisted such benefits, arguing that drivers are gig workers and not entitled to full employee insurance coverage.

The draft decree also allows the government to review agreements between platforms and drivers and guarantees drivers the right to form unions.

Neither the Indonesian government nor the presidential office responded to Reuters’ requests for comment.

President Prabowo’s administration has shown particular concern for driver welfare, with Presidential Spokesperson Prasetyo Hadi previously describing them as ‘heroes of the economy.’

A senior fellow at the ISEAS-Yusof Ishak Institute, Siwage Dharma Negara said motorcycle taxi drivers have emerged as a visible political force through protests over commissions and rights.

“Motorcycle taxi drivers have become an increasingly visible political force, staging multiple protests over commission rates and rights and drawing significant public attention to their grievances,” Dharma said.

He added that the death of a motorcycle taxi rider during the August protests increased public focus on the vulnerability of gig workers and strengthened calls for stronger protections.

In 2024, Indonesia accounted for 37% of the ASEAN taxi market due to its large population and rapid adoption of digital payments, according to data from research firm Mordor Intelligence.

The proposed rules would also apply to on-demand logistics firms such as Hong Kong-based Lalamove and J&T Express, which is listed on the Hong Kong stock exchange.