Unfazed by Grab, GOJEK dominance, new ride-hailers enter the fray in Indonesia

A GrabBike motorcycle driver, left, and a Go-Jek motorcycle driver wait for orders in Jakarta, Indonesia, on Sunday, Aug. 13, 2017. Photographer: Dimas Ardian/Bloomberg

Indonesia is witnessing the next wave of homegrown and regional startups making inroads into the country’s ride-hailing space, which is dominated by well-funded rivals GOJEK and Grab.

The new contenders include homegrown players Anterin, KlikGo and Bonceng Asia Trans, Malaysia-based ride-hailing company BitCar’s local unit, Russian ride-hailing app Maxim, and Vietnam-based FastGo.

What are the new players up against? The two dominant players – Grab and GOJEK – employ the highest number of drivers in Indonesia. GOJEK now boasts 2 million driver-partners in Indonesia, while Grab reportedly employs 2.9 million drivers across Southeast Asia.

Not to mention the formidable sums the two players have amassed in their journey towards becoming Southeast Asia’s super apps. GOJEK last raised funding in July at a valuation of nearly $10 billion. It counts Google, Tencent Holdings and JD.com among its investors.

Meanwhile, Singapore-headquartered Grab was last valued at $14 billion and is raising a $6.5-billion Series H round. Its backers include SoftBank Vision Fund, Toyota, Microsoft and Booking Holdings.

Indonesia’s ride-hailing market has already witnessed the exit of some early movers. Ride-hailing startups Blu-Jek, Ojek Syari, LadyJek, Topjek, Ojek Kampung, Ojek Argo, and Pro-Jek Now began operations in Greater Jakarta back in 2015. While their apps are still available in the Google Play store, their operations are reportedly closed.

DEALSTREETASIA contacted these companies on their official numbers but those are no longer active. Some of these websites are no longer active and their headquarters on Google Maps are marked as permanently closed.

In response to the entry of new players and market competition, Grab told DEALSTREETASIA that the company is always open and accepts positive business competition, which it said will help it become more creative and innovative.

“We do not comment regarding what other companies do. However, as the leading everyday super app in Southeast Asia, we always strive to provide the best service for users and driver-partners,” a Grab spokesperson said.

DEALSTREETASIA reached out to GOJEK and is yet to receive a response.

New players relying on a differentiated strategy to corner market share

Expand Table

CompanyCountryLaunch in Indonesia
BitcarMalaysiaAug 2019
MaximRussiaJune 2018
AnterinIndonesia2017
Asia TransIndonesiaOctober 2018
FastGoVietnamEnd of 2019
BoncengIndonesiaNovember 2018
KlikGoIndonesiaApril 2019

Anterin started as a logistics company in 2016 before venturing into ride-hailing in 2017 with its operations focused on Jakarta and the satellite cities. It now has a presence in around 30 cities in Indonesia.

Anterin founder and chief executive Imron Hamzah told DealStreetAsia that the Anterin app operates differently from its rivals. It uses a subscription-based system where prospective drivers only need to pay Rp 150,000 ($10.55) per month and do not need to give a commission fee to the company.

The service booking works like an auction-based mechanism where drivers have the freedom to ‘choose the fare price’ while passengers can choose the drivers within their most suitable price range.

In comparison, both Grab and GOJEK have a fixed fare for their ride-hailing services and the fee is determined by them. Grab and GOJEK collect 20 per cent of each transaction as a fee.

Both companies operate on a point-based incentive system where distance travelled and the frequency of rides earn the drivers more incentives.

According to research conducted by the Faculty of Economics at the University of Indonesia, the average monthly income of drivers working with the two ride-hailing companies stood at Rp 4.9 million ($344) in the Greater Jakarta area and Rp 3.9 million ($274) in the cities outside the capital.

“We are concentrating on a niche market, which is not captured by other ride-hailing players. We are not direct competitors because we operate a different system and business model,” Hamzah said, adding that the firm still does set the maximum and minimum fare for the service as determined by the government.

When the drivers have the freedom to choose their own price and customers, they do not depend on the company unlike other operators, Hamzah added.

Anterin now has 250,000 drivers for its cars and motorcycle services across the archipelago.

Meanwhile, BitCar Indonesia, which first established its presence in April this year, operates under Jakarta-based Bitokenpay Digital Indonesia.

Bitcar Indonesia chief operational officer Christiansen Wagey said that the company will start its operations in the country shortly. It plans to expand to Medan city (North Sumatera) and Surabaya (East Java) in October.

The company will use a profit-sharing system where the drivers will receive an 85 per cent commission from the fare while the remaining [portion] would go to the operator.

In the beginning, it will use a referral scheme whereby passengers would be able to receive a lower fare. It expects to enrol at least 1,000 drivers in each province in Indonesia, Wagey added.

Another local player, Asia Trans, launched its operations in October last year. CEO Suhartoni Yonathan Salusu told CNBC Indonesia the company now has 185,000 driver-partners and has ferried at least 100,000 customers.

Asia Trans now targets to have 800,000 drivers on its platform by the end of this year.

Meanwhile, Maxim, which began its business in Moscow in 2003, started to expand to other countries in 2014. The operator is focused on second- and third-tier cities such as Balikpapan (East Kalimantan) and Batam.

It now has a presence in 16 countries, including Ukraine, Kazakhstan, Georgia, Bulgaria, Tajikistan, Belarus, Azerbaijan, and Italy.

Another contender is Vietnamese player FastGo, which plans to foray into the Indonesian market in the fourth quarter this year. So far, FastGo has expanded to Myanmar and recently launched its services in Singapore.

FastGo, which boasts 100,000 monthly active users and a network of over 60,000 cars and motorcycles, also plans to launch its services in Thailand and the Philippines.

Market duopoly and concerns from the government

The Indonesian government has raised several concerns over the domination of the ride-hailing market by Grab and GOJEK.

The Transportation Ministry had initially proposed to ban discounts and promotional fares in the industry but had to later shelve the plan. The stalled regulation was aimed at minimising ‘predatory pricing’ in the market.

Sutrisno Iwantono, who is in charge of public policy at the Indonesian Employers Association (Apindo) and a former chairman at the Commission for the Supervision of Business Competition (KPPU), said that the unfair competition in the market is evident from the number of smaller ride-hailing firms that could not survive against the cash-rich giants.

“They are [GOJEK and Grab] actively burning money, offering discounts and cashback through their e-wallet, GoPay, and OVO,” Iwantono said. “For smaller players, this is not easy. They need a huge amount of capital to compete.”

Meanwhile, Bhima Yudhistira, an economist at the Institute for Development of Economics and Finance (INDEF), echoed the concerns, adding that many large cities in Indonesia have now become saturated with millions of drivers serving only GOJEK and Grab.

“When they [GOJEK and Grab] increase the ride-hailing fare, customers won’t have any choice. We should be cautious,” he added.

Can regulations help smaller players?

So far, the government has set new motorcycle taxi tariffs that are 11-20 per cent higher than the previous rates. It has also set the minimum tariff at Rp 1,850, while the maximum tariff is capped between Rp 2,300 and Rp 2,600.

The Transportation Ministry said that the implementation of the new tariff stands at 80 per cent now, which will cover 133 cities across the archipelago.

INDEF’s Bhima said the country needs to issue another regulation as soon as possible to minimise unhealthy competition and remove the duopoly in the market. He said local venture capital firms also need to finance these small operators.

“The more players we have, the healthier our ecosystem will be, which then will lead to better service quality and more competitive fare [regime] in the market. If certain operators have promising business prospects, I’m sure investors might want to invest in them.” Iwantono added.

Meanwhile, the new operators point out that drivers are often unhappy about their dependence on market leaders.

“The government should be supporting us. Regulation that only accommodates certain companies can shut down innovation and create a barrier that only benefits the big players,” Anterin’s Hamzah said.

“We are very optimistic. We have a tremendous opportunity in this market. Hopefully, the government accelerates the regulation to create a healthy competition in the market,” Bitcar’s Wagey said.

Two-Wheel Action Movement (Garda) leader Igun Wicaksono told DealStreetAsia that the newcomers in the ride-hailing industry would have a positive effect and more options for the drivers.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.