Jakarta Globe, Vanesha Manuturi, Aug 13, 2014
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A woman shows the Uber apps on her smartphone in Jakarta, Wednesday (13/8). JG Photo/Jurnasyanto |
Jakarta.
Traditional taxi companies in Indonesia may soon face a big shift in the
market, as new competition from smartphone-based transportation services like
San Francisco’s Uber taps into the insatiable demand for transportation in the
world’s fourth-most populated country.
Uber — a
software company focusing on transportation services — officially launched its
eponymous smartphone application into Indonesia on Wednesday, gunning for the
growing middle class population in the capital city Jakarta.
The
company, which has established its presence in 43 countries worldwide, had
previously arranged a soft launching in Jakarta earlier in June and rolled out
its service in the Sudirman Central Business District (SCBD).
“There are
currently tens of thousands people who have signed up for Uber. That’s what’s
exciting about Jakarta — things go viral very easily,” said Chan Park, Uber’s
head of expansion for the Asia-Pacific region, to the Jakarta Globe on
Wednesday.
The Uber
app assists Indonesian commuters in finding transportation — private driver
included — through its partnerships with local limo and car rentals, offering
brands ranging from Toyota Camry to Hyundai Sonata.
Its base
fare currently stands at Rp 7,000 (60 cents), with each additional minute
costing Rp 500 and each kilometer Rp 2,850 — placing Uber at par with local
taxis.
“You can
think of [Uber] like Expedia,” said Park, referring to a travel booking
website. “We’ll facilitate the transactions and that transportation experience
by connecting driver and transportation provider with the rider, and we provide
the app that enables that.”
Uber will
be jumping into a competitive market that’s already filled with various public
transportation options for the Indonesian middle class, such as taxis and ojeks
, or motorcycle taxis.
The company
is not the first smartphone-based transportation service to break through the
Indonesian market. Brazil’s Easy Taxi and Malaysia’s Grab Taxi — both of which
allow customers to hail a taxi from their smart phones — had already launched
their services in the capital in June and April respectively.
Mixed
reactions
The
presence of Uber and other similar transportation apps in Jakarta has so far
been met with a variety of responses by prominent business figures and taxi
companies in the area.
Teguh
Wijayanto, head of public relations at Blue Bird Group, the country’s largest
taxi operator, said new competition is not unusual, adding that the company had
already anticipated the growing use of smartphones among Indonesians with the
launch of its own Blue Bird smartphone application back in 2011.
“Competition
is something that’s expected and is needed … As long as the company continues
to push for the best services, it’s in the public’s hands,” Teguh said.
Sandiaga
Uno, an Indonesian businessman and the country’s 45th wealthiest person
according to Globe Asia’s 150 Richest Indonesian list, echoed Teguh’s
sentiments, noting that tighter competition from Uber and other similar transportation-related
smartphone apps will eventually lead to better service for customers as
traditional transportation providers work toward improving themselves.
“The
prospect looks good for Uber in Jakarta with the increasing demand for more
innovative modes of transportation from the country’s fast-growing and highly
mobile middle class,” Sandiaga said on Tuesday.
Sandiaga is
also advocating the use of the smartphone app.
In
contrast, some remain skeptical as Uber’s business model remains unclear against
Indonesia’s regulatory backdrop.
Daniel
Podiman, president director of taxi operator Express Transindo Utama, said that
Express, along with the Organization of Land Transport Operators (Organda), is
currently reviewing how Uber’s business model fits into the country’s public
transportation scene.
“We’re
waiting for more clarity on the issue … Something that’s new will always be
assessed and examined. But if it goes against regulation, then something must
be done,” Daniel said.
Regulatory
pushbacks are not new to Uber, considering its history of numerous legal
hurdles in some countries. Uber has faced lawsuits from taxi companies in
Chicago, San Francisco and Washington DC. Reuters recently reported that
Hamburg, Germany and Seoul, South Korea is seeking to ban Uber’s operations in
the area.
However,
Park said that the company has not yet been approached by regulators in
Indonesia.
“How will
the regulators react? I’m not sure. I haven’t heard anything from them,” Park
said. “But we’re not trying to come in and cannibalize [the market]. We’re
trying to provide an alternative.”
Uber is
backed by Google Ventures and Goldman Sachs.
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