Features
6 Jan 18

Indonesian Bikesharing provider out-innovates Uber

When reporting about technology and innovation in Asia, press and media usually focus on China. That’s where most of the news is, but let’s not forget it, China is also the country described as US’s & Europe’s main threat. It’s good coverage to display all the good stuff that’s happening on the other side of the fence.

But there’s more than China on this side of the world. Indonesia, for instance. Over 250 million people with mobility needs, caught in soul-crushing traffic jams and located in the middle of the world’s super growth market, South-East Asia, Indonesia has some interesting innovation to offer.

Motorcycle taxis – ojek in Bahasa - have been a valid alternative to taxis or (the lack off) public transport in Indonesia for a long time. They’re a common sight, quick, flexible and affordable. It took one young man, Nadiem Makarim in 2015 to go and have a look at what’s happening around him. He put the success of ride hailing, with Uber, Didi and Grab leading the game in Asia into Indonesia’s motorcycle reality and Go-Jek was born.

The app does much more than ride hailing. It solves everyday issues for the average Indonesian. Pick up a package somewhere, order lunch in, drive anywhere anytime – just order a Go-Jek. But the services go much further : you can get a hairdresser, cleaner, plumber, ironically even someone to change the oil of your car, to your house and pay for the services via your digital Go-Jek wallet that also allows you to pay for your phone subscription, movie tickets or electricity bill. Or to put it like Naidem Makarin does: “Go-Jek out-innovates Uber.”

Only a couple of years down the road, Go-Jek is valued at USD 3 billion and on the radar of US investment groups and the usual suspects, the Chinese internet giants. It’s not surprising that Go-Jek is backed by Tencent, who has already bought themselves into multiple mobility providers & SoftBank, the visionary Japanese tech company.

So, all is good in Indonesia? Not really. In order to sustain the 900.000 (!) drivers and to remain competitive, Go-Jek has been slashing the prices, resulting in low salaries for the drivers. Drivers make about 200USD a month, putting them at the low end of the salary scales, but it’s still slightly better than what a factory worker would make. Hundreds of drivers have been protesting for a government-mandated price floor in the streets of Jakarta. Comment from Go-Jek’s founder was that “formal economy” is not sustainable…

In conclusion, this is where were at in Asia. A handful of big sub-regional mobility providers in pre-consolidation phase, all backed up by the same investors, Tencent and Softbank. European and American providers are copying the model and also look for support of… Tencent and Softbank backed companies.

Authored by: Yves Helven