Discussion

Review the attached article describing the different strategies employed by Uber, Grab and G0-Jeck as they compete for market dominance in the ride-sharing industry. In the end, Uber decided to retreat from the region. How does Go-Jek’s strategy differ from the other companies and which company strategy do you think works best?

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper

Note: Discussion responses should be a 5-7 sentence paragraph addressing questions asked within the writing Prompt

Digital Lessons from Go-Jek,

Indonesia’s Answer to Uber

and Grab

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper

What can be learnt from the meteoric rise of Indonesia’s ride-hailing and logistics platform.

The Southeast Asian ride-hailing market was jolted

by the recent announcement of Uber’s retreat from

the region. At first glance, it would appear a

dramatic victory for Singapore-based rival platform

Grab, which acquired Uber’s Southeast Asian

operations in exchange for a 27.5 percent stake. The

merger’s real winner, though, may be mutual

investor SoftBank, which will be relieved from

having to bankroll costly competition between the

two apps. As of this writing, the completion of the

deal is on hold pending review from the Singapore

government’s anti-trust watchdog.

One person who is doubtless following the Uber-

Grab drama with particular interest is Nadiem

Makarim, CEO and co-founder of Indonesian “super-

app” Go-Jek. Coinciding as it does with the start of

Go-Jek’s push towards regional expansion, Uber’s

exit may open a path for Indonesia’s first and

biggest unicorn to extend its success beyond its

home nation.

As of January 2018, Grab’s valuation reportedly

exceeded Go-Jek’s by at least US$2 billion. But the

battle between these two companies – whose CEOs

attended Harvard Business School at the same time –

is likely to be fierce, as those who know Go-Jek’s

story will attest. In the course of extensive field

research at Go-Jek’s Jakarta headquarters and

preparation of an INSEAD Teaching Case, I learnt

how Makarim and his team built a mobile empire

despite local conditions that could not be more

different from those of tiny, orderly Singapore.

Go-Jek: A capsule history

The initial inspiration for Go-Jek rose out of the

traffic-clogged streets of Jakarta, Indonesia’s capital.

Jakartans are famously thought to spend ten years of

their lives in traffic, much of it during the morning

and evening rush. Two- to three-hour commutes are

common. Your best bet to avoid the gridlock is to

hail an ojek (motorcycle taxi). But flagging one down

was often a challenge – at least, before Go-Jek came

along. Ojek drivers were haphazardly strewn about

the city, waiting on street corners and in parking lots

to negotiate with those needing a ride.

Go-Jek began in 2010 as a call centre enabling

riders to order an ojek by phone. In 2014, inspired

by the success of Uber and other ride-sharing

platforms, Makarim launched Go-Jek as a

smartphone app. But unlike Uber and Grab, which

had both feet firmly planted in transportation at

launch and added other services later, Makarim had

a menu in mind from the outset. Ride-sharing

services alone, he reasoned, would not generate

sufficient network effects to achieve lift-off and

scale. Business would slump outside the rush hours.

To keep drivers busy all day and increase demand,

Visit INSEAD Knowledge

http://knowledge.insead.edu 01

Copyright © INSEAD 2019. All rights reserved. This article first appeared on INSEAD Knowledge (http://knowledge.insead.edu).

https://www.grab.com/sg/press/business/grab-merges-with-uber-in-southeast-asia/

https://www.grab.com/sg/press/business/grab-merges-with-uber-in-southeast-asia/

Go-Jek also offered Go-Send (a courier service) and

Go-Food (food delivery).

As Makarim explained to me, “All three are the

same essentially: a motorcycle from A to B. The

difference is in the sense that one is picking up a

human and one is picking up a package.”

By mid-2015, Go-Jek was one of Indonesia’s most

downloaded apps. In its first 14 months, the app

logged 100 million transactions. Additional services

were introduced in swift succession, including Go-

Mart (grocery delivery), Go-Clean (a housekeeping

and cleaning service) and even Go-Massage (for

booking spa treatments anywhere). In short, Go-Jek

had become perhaps the only app outside China to

merit the “super-app” status of an Alipay or

WeChat. Recently, Go-Jek moved into the fintech

space, offering an e-wallet called Go-Pay that

customers could use for all Go-Jek services. Aware

that 64 percent of Indonesians had no access to

banking services, Makarim saw great potential for

eventual expansion into transactions outside the app

system. A series of fintech acquisitions in

December 2017 brought his hopes closer to reality.

Lessons for success

Two main points of Makarim’s strategy enabled Go-

Jek to grasp the opportunities of the Indonesian

market – chiefly its 260 million-strong population, 55

percent of whom are younger than 30 – without

slamming into its many roadblocks.

First, Makarim realised from the start that the

drivers were his lifeblood. Deviating from the

standard demand-dictates-supply business logic, he

correctly predicted that a massive deployment of

available drivers would release pent-up demand for

Go-Jek’s suite of services. So while Uber spent

millions upon millions on promotions and price

cuts aimed at both drivers and customers, Go-Jek

focused marketing efforts squarely on the fleet. The

company held a string of huge, street-fair-style

driver recruitment events in basketball stadiums,

signing on drivers by the tens of thousands.

Sharply contrasting Uber’s controversial preference

to regard its drivers as independent contractors, Go-

Jek encouraged drivers to feel like an integral part

of the organisation. Drivers who could not afford a

smartphone were given loans to buy one; assistance

was granted to those who didn’t have the necessary

paperwork to register legally as a Go-Jek driver.

Drivers flaunted their association with the app via

branded attire and accessories, which quickly made

the streets of Jakarta stream with Go-Jek’s signature

shade of green.

Second, Makarim’s familiarity with the local

environment helped him sidestep pitfalls early on.

The pivotal decision to concentrate on ojeks, for

example, was doubly context-savvy: It skirted direct

competition with Jakarta’s existing taxi industry,

while dodging the nation’s transport regulations,

which applied only to four-wheeled vehicles. By the

time the app introduced four-wheelers in 2016, Go-

Jek had already cultivated a public profile as a boon

to the local economy and a patriotic symbol of

Indonesian progress.

Go-Jek’s goodwill in governmental circles was

tested on 18 December 2015, when the news broke

that the Ministry of Transportation had announced a

blanket ban on ride-hailing transport apps. This also

happened to be the day Makarim’s first child was

born. “It was both the worst day of my life, and the

best,” he told me. Less than 12 hours after the ban

was announced, however, Indonesian president

Joko Widodo overturned it, declaring, “We need to

remember that ojek exists because the people need

it.”

Makarim explains the turnabout, “It’s not always

regulatory concerns that are most important; it’s

how much political capital you have by providing

the most number of jobs, by having a million users.”

Expansion

Go-Jek’s strategy for Southeast Asian expansion is

designed to capitalise on lessons and skillsets

gleaned on its home turf. Makarim is eyeing

countries such as the Philippines and Thailand,

which share with Indonesia many of the logistical

challenges (e.g. epic traffic jams) that arise when

infrastructure cannot keep pace with urbanisation

and economic expansion. The planned entry to

Singapore is more unique, reflecting its status as an

important Southeast Asian business hub. Yet Grab

possesses a decided advantage as the earlier

entrant in these markets. The competition between

Go-Jek and Grab may be won by the platform that is

faster and better at leveraging local resources to

solve problems that prevail regionally.

Jason Davis is an Associate Professor of

Entrepreneurship and Family Enterprise at INSEAD.

He thanks INSEAD’s Emerging Markets Institute for

supporting research on Go-Jek.

Follow INSEAD Knowledge on Twitter and Facebook.

Find article at

https://knowledge.insead.edu/entrepreneurship/digital

-lessons-from-go-jek-indonesias-answer-to-uber-and-

grab-8871

Visit INSEAD Knowledge

http://knowledge.insead.edu 02

Copyright © INSEAD 2019. All rights reserved. This article first appeared on INSEAD Knowledge (http://knowledge.insead.edu).

Download the Knowledge app for free

Powered by TCPDF (www.tcpdf.org)

Visit INSEAD Knowledge

http://knowledge.insead.edu 03

Copyright © INSEAD 2019. All rights reserved. This article first appeared on INSEAD Knowledge (http://knowledge.insead.edu).

http://www.tcpdf.org

Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
4.9
Sitejabber
4.6
Trustpilot
4.8
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.

Order your essay today and save 30% with the discount code ESSAYHELP