Extending social security to taxi drivers in Jakarta

Bluebird Taxi is the biggest, most trusted and most famous taxi company in Jakarta. With millions of Bluebird Taxi on the road, it is impossible to avoid them and every foreigner visiting Jakarta is bound to take a Bluebird at least once. For expats stationed in Jakarta, Bluebird has become an everyday vehicle, and we always take a taxi for a short trip around the city.

Surprisingly, however, we do not know what kind of contract the Bluebird taxi drivers have with the Bluebird. So when I meet drivers who can speak English, I ask them about their employment environment. The taxi driver I took on the way home from today’s meeting said he started driving a Bluebird taxi in 2017, this is his seventh year and he is 51 years old. He is also a father figure, with a wife who is a housewife, one daughter and three sons. According to him, his contract with Bluebird Taxi will expire when he reaches his 56th birthday.

Bluebird drivers have a partnership agreement and are not treated as employees. Of course, the staff working on the administrative side of the business seem to have staff contracts as employees, but the taxi drivers are only treated as self-employed workers. When asked about their social insurance status, Bluebird naturally does not fulfil its obligations as an employer. This means that as an employee, they have to pay contributions to six social insurance schemes, consisting of accident insurance (JKK), death insurance (JKm), defined contribution pension (JHT), employee pension (JP), employment insurance (JKP) and health insurance (JKN). They are not obliged to pay these premiums because the bluebird taxi drivers are not their employees.

As for the driver in this case, he is an insured member of the national health insurance scheme (JKN) as a self-employed worker, and he is entitled to use the company’s clinic, which is run by Bluebird, free of charge. There is also a severance payment scheme after eight years of service, which seems to be a major incentive to work for Bluebird for a long time. They are also said to be paid a bonus equivalent to one month’s salary, which is paid before the annual post-Ramadan holiday (THR). ride-hailing companies, such as Grab Taxi and GoJek, do not offer this incentive.

In terms of the legal system, Bluebird should not be obliged to pay severance pay to its contractors, so it is likely that corporate efforts are covering this incentive. Of course, it is likely that the money is accumulated by deducting it from the ride fees collected from the drivers.

The age of 56, when the contract expires, is the effective corporate retirement age in Indonesia. People on staff contracts are often forced to retire in accordance with personnel regulations. This corporate retirement age is not stipulated by law, so the company can terminate employment relationship based on their age if it so decides. As for partner drivers, they are not allowed to drive Bluebird taxis under the company’s regulations, explaining that over 56 years of age, their driving skills also decline due to their impaired judgement.

When asked what he would do after losing their jobs, he said he would continue the taxi business, driving his own vehicle using Grab Taxi and GoJek applications. These platforms seem to take lower commission fees than Bluebird, and he says he would get more take-home pay. However, they do not offer severance pay, bonuses or free access to clinics, which Bluebird does in its corporate efforts. In other words, the sense of the drivers I spoke to seems to be that it is more beneficial to drive a Bluebird taxi for a long time while they are still in working age, and that they can just drive a platform taxi when they retire from Bluebird Taxi.
Incidentally, it is the cost of fuel that bluebird taxi drivers have to bear. Cars seem to be provided by Bluebird Taxi.

In relation to my work, I think that the taxi company should clearly fulfil its social insurance and labour law obligations as a large company if it is in effect an employee’s form of work. On the other hand, even self-employed workers should be adequately protected by the social security system. In this regard, under current law, self-employed workers do not have the right to participate in unemployment insurance or pension schemes. Aside from the application of the unemployment insurance system, the right and obligation to participate in the pension system needs to be established as soon as possible in view of the rapid ageing of the population.