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Introduction

Since 2015, online ride-hailing services like Gojek and Grab have anchored Indonesia’s gig economy, with millions of customers using their service daily.

Indonesia is home to an estimated 2.5 million to 7 million online drivers, making ride-hailing service one of the largest segments of Indonesia’s gig workforce. For many of these drivers, it is a primary means of livelihood.

The gig economy did not emerge in a vacuum; it expanded precisely because the formal sector has failed to absorb Indonesia’s growing labour force, a phenomenon economists describe as premature deindustrialisation.

As the GDP contribution from the manufacturing sector shrinks and formal job creation stagnates, platforms like Gojek and Grab have become a last resort option for millions. Protecting gig workers is, therefore, not merely a labour issue but a structural economic imperative the state can no longer afford to ignore.

However, welfare remains a distant concept for these drivers. The platforms have extracted up to 20 of individual fares in commissions, squeezing the livelihoods of millions of these mitra (partners)—how they are called in Indonesia.

In this year’s Labour Day, President Prabowo Subianto acknowledged this problem and subsequently issued Presidential Regulation (Peraturan Presiden – Perpres) No 27/2026, which aims to provide a degree of protection for online transportation workers. Among the stipulations is a new regulation that caps platform commission fees at a maximum of 8%, ensuring that mitra retain 92% of their gross fare revenue.

While this is a welcomed state intervention, Indonesia’s regulatory landscape continues to be affected by implementation gaps, minimising the impacts of progressive frameworks and policies. Even if fully enforced, the regulation still only treats the symptoms of platform exploitation rather than its root cause that leaves mitrato live precariously.

Issues

Prior to the issuance of Perpres No 27/2026, platforms extracted profit from layered deductions.

Beyond the standard commission, mitra are also charged daily fees of Rp3,000-20,000 to obtain and retain priority status. This system benefits subscribers with high-order visibility, allowing them to get orders quickly. However, it also penalises those that do not subscribe to it.

When combined with daily operational costs such as fuel, food and mobile data, a gross daily income of around Rp150,000-200,000 can easily collapse to Rp100,000 or even lower.

Both Gojek and Grab have announced plans to phase out this system, but constant observation must be enacted so that similar schemes of different variety are not introduced in the future.

Above all these, such a system is part of a platform structure that extracts financial value from mitra but offloads all operational risks, fuel price volatility, vehicle depreciation and demand fluctuation onto individual mitra.

Even the term “mitra” is problematic. By labelling drivers as independent partners (i.e. contractors) rather than actual employees, the platforms are exempted from the regulatory mandate that demands them to offer minimum wage, social security and working hour limits.

Current mapping algorithms exacerbate this vulnerability further by compensating mitra only for the delivery trip while leaving pickup distance entirely unpaid. During peak hours or low-tariff promotions, these uncompensated pickup trips consume the mitra’s fuel and time without any economic return.

The “mitra” label thus obscures what is, in economic reality, a highly dependent employment relationship where driver autonomy is nominal and operational risk is unilateral.

These two fundamental issues do not only affect ride-hailing workers like Gojek or Grab drivers; they apply to gig workers broadly.

Reclaiming Rights

The government introduced Perpres No 27/2026 precisely to remedy some of these issues.

Capping the profit-sharing commission at 8% is a meaningful step forward, and the perpres also mandates platforms to provide health and work insurance (BPJS Kesehatan dan Ketenagakerjaan) to mitigate challenges relating to the physical risks of the job, especially when road traffic accidents remain high in Indonesia.

Prior to this regulation, as of late 2025, only around 351,000 drivers had subscribed to the nation’s social protection programme. This leaves the vast majority of drivers working without a proper safety net. Again, this is where the term “mitra” becomes an impediment to the workers’ welfare.

However, the new regulation leaves the deeper socioeconomic vulnerabilities unaddressed. It does not touch upon the “mitra” term issue, creating a loophole that enables companies to provide basic securities such as minimum wage, paid leave and holiday allowance that are standard for regular employees. This is not to mention long-term financial security such as provisions for pensions, which leaves the mitra’s distant future uncertain.

To build a resilient digital economy that does not leave anyone involved behind, the Indonesian government could consider learning the best practices from around the globe.

Malaysia offers a good example, having enacted the Gig Workers Act 2025 that introduces a statutory definition for gig workers, their rights, their occupational health and safety measures, among others.

Meanwhile, Colombia’s Labour Reform (Law 2466 of 2025) demonstrates what a comprehensive protection may look like. Under the law, digital platform workers who work exclusively for a single platform are classified as dependent employees, obligating the platform to contribute to their social security, while non-exclusive workers retain independent status but remain within the social protection system. This ensures that no worker falls through the cracks regardless of classification.

Beyond this, several quick fixes to some of these issues must be considered.

For one, instead of retaining a subscription system to maintain priority status, the platforms could institute a bonus system based on performance and productivity. This would alleviate some financial strains on the part of mitra while simultaneously offer them an incentive that will benefit the platforms in the long run.

Furthermore, the government could consider policies that can expand mitra’s safety net. Provisions of holiday allowance and pensions could be pursued if the government can find a workaround to the problematic “mitra” term and recognise the prevalence as well as significance of mitra in the national economy.

Though this might seem like an additional financial burden, it will actually stimulate the purchasing power of the lower-middle class, especially at a time when industrialisation is slowing down and the nation is facing a tightening job market.

Last but not least, from a social welfare standpoint, genuine protection for gig workers must reach the household level and account for income irregularity. In practice, this means expanding social assistance schemes beyond just formal employment, as gig workers’ families do not fall into this category.

Conclusion

As the World Bank describes, gig workers are not poor enough to qualify for targeted assistance but also not formally employed to access social protections.

This is where the state must step in to create a protection scheme that recognises gig work as a distinct feature of the labour market. It also means extending accessible assistance that does not require formal employment status to qualify, including support for dependents and long-term pension provisions. In the provision of welfare for its citizens, the government must pursue available options and look outwardly to global examples.

Perpres No 27/2026 is a real win that drivers have fought for, and a commission cap and accident coverage are starting points.

However, there are gaps that remain outside the reach of this regulation. Decent coverage for gig workers requires legal recognition, fair algorithmic systems and a welfare architecture that does not only emphasise economic growth but also ensure that workers are not left behind.

The views expressed are those of the authors and do not necessarily reflect those of STRAT.O.SPHERE CONSULTING PTE LTD. 

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