App-based ride-hailing service Grab said it will comply with Indonesian government regulations on public transportation services without fixed routes to continue providing services and jobs for thousands of Indonesians, the company’s founder said on Tuesday (06/06).
The Jakarta Globe and nine other Indonesian medias were in Singapore on Tuesday to meet with one of the two founders of Grab, Tan Hooi Ling. They were briefed on the company’s next strategy in Indonesia amid stricter regulations and increasing demand for a safe, fast and affordable transport.
“We’re thankful [the government] is taking steps in the right direction to help us figure out what’s next in the revolution of transportation with technology,” Tan said.
Tan said the company is fully aware of the new rules on public transportation services without fixed routes in Indonesia, known as the PM 32, that will put vehicles used for so-called online taxis in a special category separate from conventional cabs.
The government argued the rule will provide legal protection for online-based rental transport and encourage healthier competition but many have criticized its fleet quota, which will make it difficult for Grab to achieve its target of creating five million micro-entrepreneurs by 2018.
Tan said Grab looks at the government as an “important part” of its service though the company has occasionally argued with it, including protesting some controversial points in PM 32.
“But, what’s most important for us right now is, we know there’s going to be a change and… our drivers are going to have to get through that change in a big way,” she said.
Tan said the company will try to find a solution for its drivers if the government decides to follow through with the new regulations.
Grab claimed to have more than 930,000 driver partners across seven countries in Southeast Asia. Its mobile app has been downloaded more than 45 million times so far. Though the exact number of its driver partners and users in Indonesia was never mentioned, Grab said the country is its “most important” market in the region.
Before establishing itself as a flourishing start-up with a capital of $1.44 billion collected in seven funding rounds, Tan said Grab began with a very simple idea.
“The story gets really personal to me,” Tan told reporters.
“I had trouble taking taxis in Malaysia,” she said.
Tan said Grab was born as MyTeksi back in 2011 — the name was changed to GrabTaxi a year later — to help people find a safe ride home. The idea for it came when Tan was working at a global management consulting firm and was often forced to go home very late at night.
MyTeksi evolved into Grab that now offers more than just a taxi-booking service and is available in Singapore, Malaysia, Indonesia, Thailand, Vietnam, the Philippines and Myanmar.
Grab is available in 11 cities across Indonesia and also offers motorcycle taxi — known locally as ojek — booking service called GrabBike, as well as food and package delivery.
Ojek, however, is still not formally regulated by the government.
Unregulated but Loved
“The government should make sure trains are available every five minutes, bus drivers are not driving carelessly and TransJakarta lines are cleared off other vehicles before they ban online ojeks,” 28-year-old Tri Artining Putri, a Jakarta-based office worker, said.
Tri is one of many working women in the city who depend on ride-hailing services like Grab, Go-Jek and Uber to beat its notorious traffic gridlock.
“I rely on online ojek services to get around the city,” 26-year-old Margye Jane, a radio announcer in Jakarta told the Jakarta Globe.
Margye said online ojek offers easier payment options and is available in almost every corner of Jakarta, making her commute simpler and faster compared to taking public transport.
Disfiyant Glienmourinsie, a 28-year-old working mother, is also an avid user of online transport services. She, however, prefers to use her app to order other services, including home massage and to get deliveries of food and groceries.
“It really helps whenever I need to buy groceries,” she said.
A recent survey by the Indonesian Consumer Protection Foundation (YLKI) showed when it comes to online transport service local customers prefer Go-Jek, followed by Grab and Uber.
While Grab offers fewer services compared to its homegrown competitor Go-Jek, Grab’s in-app messaging service is much more advanced — which makes communication between drivers and passengers a lot easier and improves service reliability.
Easy Pay, Easy Go
Tri, Margie and Disfiyant may have different reasons why they prefer app-based ride-hailing services over conventional transportation, but all of them agree being able to use an easy, fast and secure electronic payment system is the number one reason why they use Grab, Go-Jek or Uber.
Grab is aware of this phenomenon and the company has plans to grow its GrabPay business which will also help the Indonesian government improve financial inclusion, Tan Hooi Ling said.
GrabPay is Grab’s own mobile payment system that allows users to store and deposit money in an online account. This method requires drivers to have at least one bank account.
Tan said the total market value for transportation in Southeast Asia is $25 billion a year — for payment, it is 20 times that, or $500 billion.
“And the number is growing […] Think about the potential,” she said.
During its five years in business, Grab has evolved from its humble beginnings into both a transport and a payment company, Tan pointed out.
“Going forward, we’re going to study all major online-to-offline transactions, figure out what our customers need and make them simpler and easier to do with our technology,” she said.