Several months ago I posted a commentary on GO-JEK, a company that organizes and standardizes motorcycle taxi and delivery services in Jakarta. My comments were really about how to think about “disruption,” the business school-speak term, in the context of a firm that offers no innovation on any product but instead corporatizes a decentralized and inefficient informal industry.

I had not thought to think about the possibility that GO-JEK itself would be the victim of disruption so soon. Or that it would come not from a new market entrant, but from the authorities. According to what I’ve been able to see with just a quick news search (e.g. here), it appears that the problem is that online car services are not being inspected, while the traditional mass transit and taxi providers are. Inspections costs money, of course, which is not being paid and puts the traditional operators at a disadvantage. Another report (here) simply says that regulations forbid private cars or motorbikes from selling rides or transportation services.

The regulations come from the Ministry of Communications[ed] Transportation.

Coba lihat nama Tembusan No 7, bawah kanan, di Surat Keputusan Kemenhub. pic.twitter.com/Fl6PWNXIKs

— Paramita Mohamad (@sillysampi) December 18, 2015

Perhaps interested readers can explain the rent-seeking administrative and legal details to me. (The embedded tweet above points to the regulation being sent to the organization representing transportation businesses.)