Indonesia’s ride-hailing leaders, Maxim and Grab, are drawing a firm line in the sand and rejecting recent calls to grant full-time employee status to their motorcycle taxi (ojol) drivers.

Instead, they are doubling down on their current partnership model. One that they argue offers the best of both worlds: autonomy for drivers and broad economic opportunity.

Amending the 2003 Manpower Law

At the heart of the matter is a proposal from the Indonesian Transport Workers Union (SPAI), which has urged legislators to amend the 2003 Manpower Law to formally recognise ojol drivers and couriers as permanent employees.

The law defines employment as an arrangement involving tasks, wages, and direct supervision – a definition SPAI believes applies to gig workers using ride-hailing platforms.

Currently, however, drivers operate as independent contractors, using the apps as a marketplace to find passengers, rather than reporting to a single employer. Both Maxim and Grab contend that this model is fit for purpose given the dynamic, on-demand nature of the business.

“Full-time employee status implies a minimum of 40 working hours per week, fixed schedules, and exclusive service to a single platform,” said Yuan Ifdal Khoir of Maxim Indonesia, in a statement to ANTARA. “Over 80% of our drivers work less than four hours per week. Reclassifying them would alienate those who are unable or unwilling to commit to rigid schedules – they could lose income and the flexibility they currently enjoy.”

This sentiment was echoed by Grab Indonesia’s Chief of Public Affairs, Tirza Munusamy, who framed the debate in terms of economic inclusivity. The current partnership model, Tirza said, allows individuals from all walks of life to earn either a main or supplementary income, especially critical in times of economic headwinds.

“The partnership model not only allows drivers to set their own schedules, but also opens up opportunities for a wider segment of the population to earn supplemental or even primary income, especially during economic uncertainty or transitions,” Tirza said.

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The downside of shifting to an employment model

The stakes are high. Tirza warned that shifting to an employment model could mean strict working hours, age restrictions, and performance benchmarks – conditions that could disqualify many current drivers. “This could reduce the number of active partners by as much as 80% to 90%, significantly limiting opportunities for income through digital platforms,” Tirza said.

For companies like Grab and Maxim, the real danger lies not just in added costs or compliance burdens, but in upending a system that, in their view, fuels entrepreneurship and enables scalability without boundaries. From their perspective, turning flexible gigs into rigid jobs is akin to fixing what isn’t broken.

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The middle ground: MSME classification?

The Indonesian government, however, is looking for a middle ground. Officials are currently exploring a new legal framework that would recognise ride-hailing drivers under the micro, small, and medium enterprises category. This approach aims to bridge the benefits of informal work with state-backed support, without the constraints of traditional employment.

Under this proposed framework, drivers would gain access to perks usually reserved for small business owners: subsidised fuel, 3-kg LPG canisters, and microcredit loans (KUR) backed by the government. It’s a move designed to cushion the financial vulnerability of gig workers while maintaining their operational freedom.

Both Grab and Maxim are on board with this direction. They see it as a step forward that preserves what drivers value most – flexibility – while offering developmental and financial lifelines. The companies have publicly supported the government’s MSME classification plan, viewing it as a way to formalise informal work without stripping away its key advantages.

By positioning drivers as micro-entrepreneurs rather than employees, the government and platforms may be betting on a third way – one that avoids the legal headaches of employment reclassification while still providing a safety net.

Redrawing the lines of employer-contractor relations

For business and HR leaders observing from the sidelines, the debate underscores a broader global conversation about the future of work. As the gig economy becomes a cornerstone of modern labour markets, the lines between employer and contractor, job and gig, are increasingly blurred.

Indonesia’s experience may well serve as a bellwether for other emerging markets facing the same balancing act.

In the end, it’s not just about labels – employee or partner – but about designing systems that deliver dignity, security, and opportunity.

And that, as any HR professional knows, is a fine line to walk.