Indonesian President Prabowo Subianto has directed ride-hailing giants, such as GoTo Group and Grab, to provide religious holiday bonuses to their gig workers before the Eid al-Fitr celebrations.

Indonesia has long mandated the Tunjangan Hari Raya (THR), or Religious Holiday Allowance, which requires employers to pay bonuses to employees ahead of major religious holidays like Eid al-Fitr and Christmas.

The government has set a clear timeline that requires private firms and state-owned enterprises to distribute the bonuses at least seven days before the start of Eid, which is expected to fall on 31 March.

The Manpower Ministry is expected to issue formal regulations as early as 11 March to outline the disbursement process for ride-hailing companies.

In total, Indonesia has some 250,000 active online drivers and couriers, with up to 1.5 million working on a part-time basis.

Accelerating the economy

The order aligns with the president’s aim of stimulating consumer spending and reinforcing his pro-labour stance. He has expressed plans to accelerate economic growth from 5% to 8% during his tenure.

Prabowo appeared publicly with GoTo CEO Patrick Walujo and Grab CEO Anthony Tan when he announced the policy in Jakarta on Monday.

“With this policy, online drivers and couriers can spend the Eid al-Fitr holiday and homecoming in good condition,” Prabowo stated, highlighting the essential role these workers play in the country’s transport and delivery networks.

The end of Ramadan is a peak travel period for millions of Indonesians returning to their hometowns for family reunions.

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Upholding workers’ welfare in a tough economy

While the specifics of the holiday payout are still under discussion between the ride-hailing firms and the Manpower Ministry, the bonuses will likely be based on how active drivers are on the platform.

Both GoTo and Grab have signalled their commitment to compliance. However, some observers believe the holiday bonuses represent another financial hurdle for ride-hailing companies.

This is especially true since GoTo and Grab have been striving to make a profit after investing in operations and marketing across Southeast Asia.

For their part, GoTo has clarified that the bonuses would be extended to “eligible driver-partners who meet specific criteria”.

Grab, on the other hand, detailed that its payments would be based on various performance metrics, including completed orders, order completion rates, online activity, and driver ratings.

Global pressure on gig work benefits

The directive places Indonesia in step with a broader global trend of increasing regulatory scrutiny on the gig economy. Ride-hailing firms like Grab and GoTo, which categorise drivers as independent contractors rather than full-time employees, have faced increasing calls to offer better benefits to their workforce.

This push has been further amplified by recent driver protests in Indonesia demanding holiday bonuses, adding urgency to government intervention.

The policy also mirrors similar international efforts to enhance gig worker protections. In Singapore, for instance, Grab committed to investing US$4 million annually in driver welfare following new legislation passed in 2024 to safeguard gig workers’ rights.

The THR tradition and its economic implications

Governed by the Ministry of Manpower, THR payments are determined based on factors such as tenure, salary, and company profitability. Employers must distribute these payments at least a week before the holiday, ensuring that workers can cover their festive expenses.

By extending this expectation to gig workers, the government is reinforcing its commitment to fair labour practices, albeit at a potential cost to businesses navigating already tight margins.

Also Read: Why protecting gig workers' rights matters

Possible economic ripple effects

Prabowo’s latest directive fits within a pattern of populist economic policies designed to stimulate domestic consumption. His administration has already granted a higher-than-anticipated minimum wage increase and rolled back a planned value-added tax hike. Given that private consumption makes up more than half of Indonesia’s GDP, these measures are pivotal in sustaining economic momentum.

However, the challenge lies in achieving business sustainability while providing worker benefits. For companies like GoTo and Grab, the holiday bonus requirement introduces an added operational expense at a time when both are prioritising profitability.

The extent to which this policy influences gig worker satisfaction, consumer spending, and overall economic performance will become clearer as implementation unfolds.

Regulatory oversight is tightening and labour rights are gaining prominence in Indonesia’s ride-hailing sector.

As gig workers receive their long-awaited holiday bonuses, businesses will need to respond to evolving expectations while keeping an eye on the bottom line.