ITB Economist Values Tariff Increase Potentially Lowers Demand For Ojol

Illustration (Photo: Doc. Antara)

JAKARTA - Director of the Center for Policy and Public Management of the Bandung Institute of Technology (SBM ITB) School of Business and Management, Yudo Anggoro, assessed that the increase in online motorcycle taxi (ojol) fares has the potential to reduce demand for this mode of transportation.

According to Yudo, currently ojol has become a basic need for the community in carrying out activities, mainly due to the position of ojol as a feeder transport which is quite vital for people who want to use public transportation such as trains and buses.

"This online motorcycle taxi offers practicality and convenience, something that other modes of transportation don't offer. If the ojol fares really go up, it is feared that many people will switch to using private vehicles," Yudo said as quoted by Antara, Wednesday, August 24.

Yudo said that if people prefer to switch to private vehicles, new problems will arise, such as congestion and increased carbon emissions.

In addition, he continued, the burden of public expenditure will also increase.

"Some of these ojol users are middle to lower class people. If they switch to private vehicles, they have to think about buying fuel, oil changes, servicing and so on. Their burden is increasing because the increase in wages is not proportional to inflation which reaches 5 percent," said Yudo .

Before coming into force on August 30, 2022, Yudo suggested that the government, operators, and ojol partners should sit down together so as to come up with the right solution.

"Moreover, the current economic situation is difficult, not to mention the issue of rising fuel prices and inflation, which are feared to reduce the number of orders from ojol itself," said Yudo.

The government has indicated that it will increase the subsidized fuel type pertalite this week.

The increase itself is feared by many parties will further burden consumers and motorcycle taxi drivers and will have an impact on decreasing demand.

On August 4, 2022, the Ministry of Transportation issued a new ojol tariff through the Decree of the Minister of Transportation Number KP 564 of 2022 concerning Guidelines for Calculation of Service Fees for the Use of Motorcycles Used for the Interest of the Community by Application.

The new tariffs in KP 564 of 2022 have increased varying, ranging from 30 percent to 50 percent.

The new tariffs are planned to take effect 25 days after the decision is made, or on August 30, 2022.