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Uber Technologies Inc. plans to set up an Indonesian entity to deal with challenges from authorities to its push into one of Asia’s largest markets.
The ride-hailing company has had cars seized in Jakarta this month and drivers questioned by police, Michael Brown, Uber’s regional manager for Southeast Asia, said in an interview. The company needs to register to pay tax, Jakarta Governor Basuki Purnama said in a televised briefing on Friday, after saying it doesn’t have the right permits.
Uber is in discussions to submit an application to become a registered onshore entity as asked by Jakarta authorities, Brown said on Monday. The company is obeying Indonesian law, is tax compliant and is working with the government to “get aligned” with everything it is asking for, he said.
“We see some things here that are new and challenging,” Brown said, referring to “special interests” working against the San Francisco-based company that he declined to identify. “We don’t like that.”
Indonesia’s President Joko Widodo is trying to attract investment and tackle corruption to spur an economy growing at its weakest pace since 2009, yet U-turns on policies from taxes to foreign worker permits have left investors confused. Foreign direct investment has stagnated and the rupiah is Asia’s second-worst performing currency this year.
Some of Uber’s junior employees have been taken to police stations for hours of questioning, Brown said. Police confiscated 30 Uber cars but didn’t detain drivers, said Jakarta police spokesman Muhammad Iqbal.
The smartphone application allows users to order rides from private drivers. It is offering fares at discounts of as much as 50 percent compared to taxi operators in greater Jakarta, home to an estimated 30 million people and some of the world’s worst traffic. Its competition includes taxi companies such as PT Blue Bird and PT Express Transindo Utama.
Uber has run into strident opposition from taxi drivers in the U.S. and abroad as it has expanded to build its business, valued at $50 billion.
Uber has sent a message to customers in Jakarta, asking them to take to Twitter to tell the authorities why they need it.
“Uber can say what it wants,” said Adrianto Djokosoetono, the head of the country’s land transport association and a director at Blue Bird, Indonesia’s largest provider of taxis, car rentals and chartered buses. “They are in a tricky situation having to follow the laws so they have to ask for public support.”
