Indonesia to classify online motorcycle taxi drivers as MSMEs

The Indonesian government is finalizing a presidential regulation regarding the digital transportation ecosystem, with a target completion date before August 17, 2026. The regulation specifically focuses on two-wheeled vehicle services, covering passenger transport, logistics, and document delivery.

A key component of the decree is the reclassification of online motorcycle taxi (ojol) drivers as micro, small, and medium enterprises (MSMEs). This status is intended to provide drivers with legal certainty and access to government incentives, such as low-interest micro-loans (KUR), social security (BPJS Ketenagakerjaan), and digital training, while allowing them to maintain flexible working hours.

Officials have addressed concerns regarding taxation, with MSME Minister Maman Abdurrahman clarifying that the new status will not impose new tax liabilities on drivers, as their typical turnover falls within tax-exempt thresholds. The regulation also aims to address high application fees by implementing commission limits to ensure a more equitable income distribution for drivers.