The Growth of Online Transportation Companies in Indonesia
Online transportation in Indonesia has grown fast since 2015, but the road was rough. See how Go-Jek, Grab and Uber competed and the pushback they faced.
Shopping is not the only thing people can do online anymore. Thanks to ever more advanced technology, almost everything can now be done through an app. This has indirectly made life easier, and one clear example of technology applied to daily life is online-based transportation.
Online transportation in Indonesia has grown significantly over time, though the path has not always been smooth and has often been marked by debate. Here is a look back at the development of online transportation companies in Indonesia:
A Look Back at Online Transportation
The year 2015 was a phenomenal one for online transportation services. In just 12 months, services such as Go-Jek grew from a mobile app into a major transportation provider. Go-Jek met fierce resistance from GrabTaxi, which launched GrabBike. The rivalry grew even more intense with the arrival of the US-based service Uber, which had been present in Indonesia since 2014.
In 2016, competition among the three startups heated up further. GrabTaxi changed its name to Grab and worked to keep pace with Go-Jek. Grab also offered a food delivery service. When Go-Jek launched its Go-PAY payment feature, Grab launched a similar one called GrabPay Credits.
Uber then raised the stakes by introducing UberMotor to compete with GrabBike and Go-Jek. The other two hit back with Go-Car and GrabCar, launched just one week after Uber rolled out UberMotor. Competition among the three only became fiercer.
Facing Pressure
As noted above, the growth of online transportation has not always been smooth. In 2016, thousands of conventional public transport drivers felt their income had dropped since online transportation arrived, and they staged protests. The wave of demonstrations, dominated by taxi drivers, forced the government to take a position. Then, at the end of 2016, the taxi companies that had opposed online transportation changed course. They came to see it as an opportunity and began partnering with the platforms. Examples include BLUE Bird with Go-Jek and Express Group with Uber, which allowed users to book taxis through those apps. The challenges did not end there. At the end of 2016, Go-Jek and Grab were themselves the target of protests by their own driver partners, who said their earnings were too low.
A Wide Range of Services
Since 2016, online transportation companies have introduced a variety of distinctive services. The strength of the three leading players pushed aside Blue-Jek, TopJek and LadyJek, which now focus more on logistics. The three leaders kept innovating with unique and appealing services, including Go-Clean and Go-Massage. Newer offerings are just as unusual: vehicle repair and washing through Go-Auto, mobile credit top-ups through Go-Pulsa, and medicine delivery through Go-Med.
One of the most noticeable changes was Grab switching its instant payments to OVO, while Go-Jek stayed loyal to Go-Pay. Competition grew even tighter when Go-Jek secured funding of Rp7.3 trillion, followed by Grab with Rp10 trillion, plus an investment from the automaker Honda. Uber also raised funds from sources ranging from Letterone Holdings and Morgan Stanley to Saudi Arabia's Public Investment Fund. All three startups are called unicorns, meaning startups that have raised substantial funding.
It is worth noting that transportation-related companies are not limited to ride services. Some offer used vehicle sales (Mobil88), vehicle auctions (IBID) and car rentals (TRAC), as in the case of SERA (SERASI AUTORAYA), part of ASTRA. TRAC is quite helpful to online taxi drivers, since many of them rent cars to support their work.
That is the story of how online transportation companies have developed in Indonesia. We hope you found this information useful.
