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Uber ties up with No. 2 Indonesian taxi operator

Landmark deal signals end of cab industry's opposition to ride-hailing services

Conventional taxi drivers in Indonesia staged rallies against ride-hailing apps Uber and Grab on Tuesday, clogging some of Jakarta's main arteries.

JAKARTA -- Uber on Monday said it will partner with Express Transindo Utama, Indonesia's second-largest taxi operator, marking a turn in the standoff between ride hailing companies and the traditional transportation industry.

In a joint press release, Uber said it will launch a trial program in Jakarta, in which some of Express's 11,000 taxis will become available for booking on Uber's low-cost uberX service. A spokesman for Express said the trial will start on Wednesday, but declined to comment on the number of taxis joining the trial. Uber, which runs services in five Indonesian cities, does not disclose operational figures.

The program also allows Uber drivers to lease former Express vehicles that are no longer used as taxis, with payments deducted from their weekly earnings. Uber aims to lure drivers who are currently unable to afford cars and instead sign up to services that dispatch motorbikes, which are much less expensive.  

The partnership "is intended to make ride sharing more reliable for passengers and open up more economic opportunities for partner-drivers," said Eric Alexander, Uber's head of business in Asia.

The deal signals an end to the heavy opposition by the taxi industry against Uber and other online ride-hailing services. Express has been suffering from competition from online competitors, reporting a net loss of 81 billion rupiah ($6 million) for the first nine months of 2016. Blue Bird, the country's largest taxi operator, has also announced a partnership with Go-Jek, a local motorbike ride hailing service.

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