{"id":15487,"date":"2016-11-17T02:23:03","date_gmt":"2016-11-17T07:23:03","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/go-jek-motorbike-taxi-with-smartphone-changing-the-landscape-in-indonesia\/"},"modified":"2016-11-17T02:23:03","modified_gmt":"2016-11-17T07:23:03","slug":"go-jek-motorbike-taxi-changing-the-landscape-in-indonesia","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/go-jek-motorbike-taxi-changing-the-landscape-in-indonesia\/","title":{"rendered":"GO-JEK: Motorbike taxi changing the landscape in Indonesia"},"content":{"rendered":"

\"photo4\"<\/a>GO-JEK is a ride-sharing and on-demand services with motorbike taxi (\u201cOjek\u201d in Indonesian language). Using the app, customers can find a motorbike driver for riding and other services. The app has been downloaded 25 million times [2], and processed 667,000 booking requests per day in June 2016 [3]. What makes GO-JEK so successful in Indonesia? Isn\u2019t it just a copy cat of Uber with motorbike? There are three factors that make this business model so powerful.<\/p>\n

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\"jakarta-traffic-jam-533x300\"First, GO-JEK is trying to solve one of the biggest headache in Indonesia \u2013 traffic congestion. Jakarta, the capital city with population around 10 million, was ranked as the worst city for traffic stops and starts (33,240 times a year on average \u2013 more than twice the number in New York) [4]. The average driver can only drive 8.3 km per hour, half of New York drivers [5]. In such an
\nenvironment, motorbike is the fastest way to move around the city, by zipping in and out of the traffic jams. In my personal experience, it only takes 15-20 min to travel by GO-JEK compared to more than 1 hour by taxi with the same distance during the rush hour.<\/p>\n

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\"gojek-uniform\"<\/a>Secondly, GO-JEK is creating employment of the country. The number of GO-JEK drivers, 800 when they launched its app in 2015, has now increased more than 240,000 across Indonesia [6], almost three-fourths of Uber\u2019s active drivers in U.S. [7]. Although many of them were Ojek drivers before GO-JEK started, their life has changed dramatically. They used to be idle for seventy-five percent of their time, but now their businesses have become much more efficient with GO-JEK \u2013 some said their salaries doubled [8]. Now the drivers with green jackets and helmets were one of the symbols in Jakarta.<\/p>\n

\"photo3-2\"<\/a>Lastly, GO-JEK is not only about ride-sharing. They provide a wide range of delivery, not only of goods (food, parcel, medicine, movie tickets) but also services (cleaning, massage, hair styling, nail care, auto repair). These services are enabled by low labor cost in Indonesia, maintaining the competitive prices for customers. They also provide payment methods considering the local needs. Operating in the country where credit card penetration rate is less than 10% [9], GO-JEK offers two methods to customers: cash on delivery and GO-PAY, in which customers can pay without cash. They only need to top up the balance through either ATMs or internet\/mobile banking. Travis Kalanick, Founder and CEO of Uber, envisions the world with \u201call the other goods and services that you could one day get delivered quickly, safely, with just the single touch of a button\u201d [10]. For now, GO-JEK is ahead of Uber to achieve his vision.<\/p>\n

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\"grabbike\"<\/a>GO-JEK has also been facing challenges – competition. The biggest competitor of GO-JEK is Grab, a ride hailing start-up also founded by HBS alumni Anthony Tan and Hooi Ling Tang (both MBA 2011). Operating in 30 cities across Southeast Asia, Grab is expanding its business aggressively into the biggest country in the region. Recently Grab started GrabHitch, a service that offers ride sharing on motorcycles. With the similar concept to UberPool, Grab is trying to capture customers and drivers from GO-JEK. Uber is also a huge threat for GO-JEK. In order to adopt the market, Uber launched a motorbike service, UberMoter, and started offering cash payment option as well.<\/p>\n

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\"\"<\/a>Similar to ride-sharing services in other countries, government regulation is also a challenge. In December 2015, the Transport Ministry issued a letter to ban taxi and motorcycle hailing apps operating in the country [12]. Luckily, Joko Widodo, President of Indonesia, slammed the Transportation Ministry’s move and the Ministry withdrew the letter one day later [13]. However, given there has been ongoing complaints from the taxi industry, GO-JEK needs to watch out the moves.<\/p>\n

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So where GO-JEK should move going forward? I suggest three action plans:<\/p>\n