Sharing Economy in Indonesia with A Case Study on Go-Jek Mobile App

Author: Taiming (Terry) Lu

The rapidly developing sharing economy in Southeast Asia has witnessed the successes of numerous Internet start-ups. Indeed, the large population base in the region, coupled with the nation-wide passion on entrepreneurship, has driven the entire region go cashless across transportation, dinning, delivery, as well as many other social sectors.

In the summer of 2017, I went to Jakarta, Indonesia for a one-week research project on sharing economy case studies. By interviewing riders, passengers and other users of Go-Jek, I have been surprised to learn how amazing this cellphone application has facilitated the daily life in Indonesia. As a nation with nearly 300 million citizens, Indonesia is puzzled by traffic jam across the nation, especially in its national capital, i.e. Jakarta. For example, sometimes you would need more than two hours to travel by car for merely 2 kilometers in downtown Jakarta at peak hours. Efficiency, therefore, is significantly undermined due to challenges from transportation.

Go-Jek, an innovative solution to transportation challenges, has been helpful in improving inter-city travelling in the capital. It is primarily based on motorcycles to send passengers from one spot to another. On one hand, the small size of motorcycles ensures the speed of moving as they would not be stuck in the middle of a traffic jam. On the other hand, it offers affordable alternatives in transportation in a populated capital where multi-level traffic such as cloverleaf junctions and subways is not yet available.

The color of green is omnipresent in the city of Jakarta as riders from both Go-Jek and its competitor Grab wear green jackets at work. In order to more accurately understand the functions of these applications, I downloaded Go-Jek, Grab and Uber into my cellphone. It is surprising to learn how comprehensive the types of services have been included in mobile applications such as Go-Jek. Indeed, you could enjoy a wide range of regular transportation, dinning and housework services by simply clicking on your cellphone.

In addition to finding the nearest motorcycle rider and getting to your destination with his service, you could also pick up a restaurant upon your interest and have the food delivered to your place by a rider, hire a popular massage therapist to relax your muscles at home after an intensive gym training, or invite one of the best professionals in town to complete an in-depth cleaning services for your apartment, and so on so forth. In other words, such mobile applications originated from providing transportation options and have incrementally turned into lifestyle platforms that penetrated into almost every section of daily life. If there is only one application to install in the cellphone, I believe that Indonesian users would choose Go-Jek or Grab without any hesitation as they could manage a variety of daily lifestyle options on these platforms.

By recording the frequency of orders and interviewing motorcycle riders during rush hours around the center of Jakarta, I have been impressed by the presence of sharing economy in the society of Indonesia. Riders told me at interviews that employment opportunities from Go-Jek are crucial and helpful for them to increase income. Moreover, flexible working schedule facilitate riders to manage their own calendars in an efficient manner so that they could spend precious time to accompany their family members.

Indeed, labor surplus in a populated nation such as Indonesia has led to affordable services in labor-intensive sectors including motorcycle transportation and delivery. To be specific, you only need to pay no more than one US dollar to travel for at least three kilometers in an exclusive door-to-door motorcycle riding service. Moreover, the application of GoPay as a payment method is extremely promising in the era of Internet. Users could charge their GoPay account by online banking and later use credits from GoPay to automatically pay for riding and other services. It is like Alipay in China that replaces traditional ways of payment and improves efficiency in daily transactions. The rise of Internet-based services and payments, therefore, has significantly transformed the existing options in commercial activities and presented amazing potential for prospective development in the future.

In spite of rapid development in Indonesia, Go-Jek is also facing a number of challenges ahead. On the way of going global, Go-Jek has to compete with other players in the market. Without the unique scenario and advantage in Indonesia, it is hard to predict the scope of Go-Jek. The capital market has been closely working with Go-Jek and its domestic competitors to finalize the long-lasting rivalry. It is essential for Go-Jek to learn from its Chinese counterparts such as DiDi to fully understand the limit in a single national market and what it could do to dominate the Indonesian market by methods including M&A. Go-Jek, as well as other innovative start-ups in the Internet sector, has greatly facilitated users across nations in Southeast Asia to better get connected with the rest of the world.

Taiming (Terry) Lu is currently studying at Staten Island Academy, New York. He is a MuseEducation Research Fellow and conducted sharing economy research project in Indonesia in the summer of 2017.

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