App-Based Transportation: Grab Sees Strong Growth in Indonesia
Grab, the Malaysia-founded online application used for transportation services, has experienced remarkable growth in Indonesia during the first half of 2016. GrabCar and GrabBike have grown some 250 percent despite a 50 percent cut in its fare subsidy in this period. More than 25 percent of active Grab users in Indonesia use Grab services more than once a month. This success is due to the government's decision to legalize mobile application-based transportation services (under specific conditions) and the re-branding of Grab (formerly it was known as GrabTaxi).
Grab has become the leading transportation app in Indonesia, offering consumers various means of transportation, from taxis and private vehicles to motorcycle taxis and courier services. The management of Grab recently stated that Indonesia has become the company's largest market, particularly the capital city of Jakarta and its satellite cities where, combined, there are some 30 million customers (and many more potential customers). Indonesia is the world's fourth-most populous nation and therefore Grab also has plans to expand beyond the Greater Jakarta region and Surabaya.
According to a statement on Grab's official website, the app-based company is the leading mobile on-demand transportation platform in Southeast Asia, a region home to some 620 million people. It provides its services in 30 cities across Indonesia, Singapore, the Philippines, Malaysia, Thailand and Vietnam. The company started as a taxi-booking app in 2012. However, it developed additional services including private vehicle rental services (GrabCar), ojek/motorcycle taxi services (GrabBike), carpooling (GrabHitch) as well as pick-up and delivery services (GrabExpress). As such, the company has been a major competitor of the traditional transportation services, particularly taxi services.
In May 2016 Grab also launched GrabFood in Jakarta, an app-based service. Through this app on their mobile phone those city dwellers living in the center of Jakarta and who do not have time to go out and get food, can order the meal (including the delivery).
In March 2016, Grab started a partnership with one of Indonesia's leading e-commerce platforms - MatahariMall.com - owned by the Lippo Group. Through this partnership the e-commerce platform can offer more effective online-to-offline services. Both companies benefit from this partnership.
Last year and at the start of 2016 there emerged outrage about the presence of new online transportation applications such as Uber Taxi, GrabCar and Go-Jek in Indonesia. These new players caused quite some missed income for the traditional services such as taxis, buses, ojek and bajaj (three-wheeled scooters). Moreover there was unclarity about the legal status of these app-based transportation services. After several demonstrations, staged by thousands of taxi drivers, in Jakarta in March 2016, the government unveiled Ministerial Decree No.32/2016 on the Operation of Taxis. This regulation states that app-based transportation firms are required to partner with a registered transportation company (and need to have an official workshop as well as a minimum fleet of five cars that all undergo roadworthy tests).
Read more: Indonesian Taxi Drivers Protest Against Uber, GrabCar & Go-Jek Apps