A Super App Connecting Drivers and Communities

GoJek

1. No Poverty 3. Good Health and Well-Being 8. Decent Work and Economic Growth 9. Industry, Innovation and Infrastructure

Overview

GoJek is the first ride-sharing business in Indonesia. It was a startup turned unicorn that has tremendously impacted everyone living in Indonesia. Many GoJek drivers used to live in poverty and suffered from not having access to an education. But now they have the opportunity to earn more than ever and experience financial stability for the first time in their lives. Each GoJek driver has become a "micro entrepreneur," Makarim said. Since joining GoJek, the quality of life for driving partners with the app has improved exponentially. The incentive plan and its policies, implemented by GoJek, has allowed ojek drivers to continually improve their families’ welfare. Many of the drivers can even afford to send their children to school now. The GoJek ecosystem supports the growth of MSME’s (Ministry of Micro, Small, and Medium Enterprises) in Indonesia. 93% of MSME’s partners experienced an increase in transaction volume, and 55% of MSME’s partners have moved up in terms of turnover classification.

Authors

Tori Santo Tomas

Tori Santo Tomas

Felicia Lo

Felicia Lo

School

Loyola Marymount University

Loyola Marymount University

Professor

Trevor Zink

Trevor Zink

Innovation

GoJek started with a goal to create ride-sharing services in an accessible, efficient and convenient manner. The original founders, Kevin, Andre and Nadiem, started out to create their innovative idea in a call center. Initially the GoJek app started out as a source of ojek ride sharing and was designed to provide transportation only. However, with its increased popularity, GoJek expanded itself from only providing transportation services to a super app. Since its humble beginnings, GoJek has amassed into an ecosystem of apps within one super app. Their new brand and app contains 22 services that range from food deliveries to house cleaning and e-wallet services. According to Aaron, “[they] are building the largest consumer transactional platform in Southeast Asia and want to be everything for everyone. This ambition is driven by the fundamental belief in [the] transactional ecosystem model that connects millions of customers on [the] platform to millions of drivers, merchants, and service providers.” The idea of integrating several services into a super app is a strategic implementation that reduces the hassle of downloading separate apps. Instead, consumers can download one app that satisfies multiple needs by connecting them with people in need of more business exposure. GoJek has become Indonesia’s industry leader across a number of verticals including transportation, food delivery services, mobile payments, financial services, logistics, and merchant services. The platform exists to solve imbalances in the market and provide solutions to the problems faced by users and partners. Aaron is positive that “users are prepared to pay for the benefit of reaching others who can provide them with what they need.” GoJek’s focus on the user and providing solutions for their daily needs has allowed them to continuously create products and services that create value for more people and improve daily lives. This is value their customers are willing to pay for.

A Super App Connecting Drivers and Communities

Inspiration

The inspiration behind GoJek began around nine years ago when Nadiem Makarim was a consultant that needed to travel between meetings every day. Nadiem relied on grey market motorcycle taxis, ojeks, to get to his appointments on time despite Jakarta’s notorious traffic jams. Nadiem would have conversations or coffee with his drivers, which led to Nadiem realizing that most of the ojek drivers were hardworking and trustworthy individuals with great potential. Nadiem believed that many Indonesians were concerned with the professionalism and trustworthiness of ojek drivers. So when developing GoJek, one of Nadiem’s main concerns was creating a way to match customers with trustworthy ojek drivers in a professional, accessible way. He also saw the prevalence of motorcycles in Indonesia as a great business opportunity to use these motorcycles as an efficient way to combat traffic in the cities. According to Aaron, these founding stories of the company really set the stage for their “DNA, culture, and approach” to connecting people.

GoJek has boosted employment for many people in Indonesia and taken them out of poverty directly. One of Nadiem’s biggest goals was to specifically help ojek drivers that did not have a steady income or job. By creating GoJek’s GoRide, individuals that did not receive an education or felt stuck in poverty are now able to make a living and provide for their families. GoJek has also taken the extra step to not just look out for their drivers, but also their families’ health and well-being. By launching the Swadaya Program, GoJek is able to provide drivers with access to welfare programs. GoJek also provides their workers with decent work and pay, higher than the average minimum wage. The average income of driver partners of GoJek is Rp 3,31 million, while the average minimum wage in other cities is Rp 2,80 million. GoJek’s partnerships with SMEs across Indonesia has also caused a mass increase in SMEs transaction volume, which has helped GoJek boost the economy. GoJek is an innovation for better access for commuting in not just Indonesia, but many other South Asian countries. GoJek has been able to replicate the impact that consumers have seen in Indonesia in new markets. Gojek strives for similar customer satisfaction and security levels, making it able to boost industries around the world.

Overall impact

GoJek’s hyper-local strategy is the reason why they are so successful in Indonesia and a leader across key verticals: ride, food, and online payments. The success met in Indonesia for GoJek shows that going local and listening closely to customer needs can have a big impact. GoJek aligns itself under certain Sustainable Development Goals. GoJek has achieved providing decent work and economic growth, industry, innovation and infrastructure, no poverty and and providing good health and well-being. In terms of improving Indonesia’s economic growth and innovation, industry and infrastructure, Aaron has explained that “Gojek’s contribution to socio-economic impact to Indonesia’s economy as of 2018 has amounted to almost Rp 55 trillion (US$3.85 billion), based on research conducted by the Demographic Institute of the Faculty of Economics & Business, University of Indonesia.” GoJek has also been able to expand their innovation to other South East Asian countries such as Thailand, Vietnam, Singapore, and the Philippines, which further improves the economic stability of these developing countries.

GoJek has also taken an initiative to create the Swadaya Program in order to give benefits to its ojek drivers. The Swadaya Program is a program that aids families' level of welfare by offering a variety of financial services for their drivers. This includes low-cost credit packages, insurance, education plan savings, and various discount promotions like mobile data plans. GoJek also promotes flexible working hours, making it easier for locals to become ojek drivers and earn income. There are currently over 1 million drivers working as driver. According to Aaron, the process to become ojek drivers for GoJek is fairly simple. The applicants needs to have proof of a driver's license, insurance and proof of a motorcycle. The requirements of being an ojek driver is not as daunting and easily manageable for locals since educational requirements are not necessary. This reduces inequality because now locals have an opportunity to earn income to improve their living standards and to provide financial stability for their families.

Business benefit

GoJek has benefited businesses both internally and externally. Moving from a focus on two-wheeled vehicular services, GoJek has created new services that aligns with meeting the everyday needs of people. Since the super app was established, GoJek is no longer just a ride-hailing company, since their source of income has expanded to services such as providing household and business necessities (GoClean and GoShop), food deliveries (GoFood), business to business deliveries (Go-Box) and consumers to consumer delivers (Go-Send). As of March 2019, there are over 108 million downloads for the Gojek app, including 25 million monthly users. Moreover, as of 2018, Gojek’s nominal profit has exceeded $9 billion and reached two billion transactions a year in total. In 2018, Gojek has acquired 1.7 million drivers and around 400 merchants.

Social and environmental benefit

Since its establishment, GoJek has several social and environmental benefits. Firstly, GoJek initiated a program where they turn trash into cash. GoJek has participated in a waste management program where people can exchange their plastic waste for cash. GoJek has collaborated with property developer Agung Podomoro Land, which allows users to exchange used plastic bottles, paper and batteries with GoPay, which is a cashless payment system, at Podomoro City area in West Jakarta. To deal with climate change and reduce its carbon footprint, GoJek has conducted a pilot study on electric motorcycles for its drivers by partnering with Indonesia’s largest automotive company, Astra International. By 2025, Indonesia’s goal is to have around 2.1 million electric motorcycles and 2,200 electric cars. However, this goal seems difficult to achieve due to how electric vehicles have yet to gain popularity in Indonesia due to the lack of legislation and inadequate infrastructure. In terms of the social aspect, GoJek has helped more than 30,000 people with different talents to be able to earn an income and make a living - including disabled people. Aaron shared a story of a citizen named Sumani who was physically handicapped after an accident in 1997 and had his leg amputated. Today, he works as a GoBox driver and helps people move houses. A survey was conducted that asked GoJek drivers and MSME’s about their incomes before and after joining GoJek. Results show that after joining GoJek, GoJek drivers’ incomes increased by an average 44%, while their spending increased by an average of 31%.

Interview

Aaron Gomez, VP of Digital Strategy

Keep this story going! Share below!

GoJek

GoJek

Jakarta, ID

Business Website: https://www.gojek.io

Year Founded: 2010

Number of Employees: 1001 to 5000

GoJek started out with a mission to improve the livelihoods of local motorcycle taxis. It has grown into Southeast Asia's leading on-demand multi-service platform and digital payment technology group that has developed a "super app" to accommodate many user needs. In a country where transportation was limited and in need of improvements, GoJek created the ride-hailing sector in Indonesia. Currently, GoJek has become the largest “Super App” in the country with 22 services. GoJek is named after “ojeks,” which are motorcycle taxis that offer a ride-hailing service in Indonesia. Nadiem Makarim, GoJek’s founder and CEO, found that the high demand of ojeks and motorcycles influenced Indonesia’s economy and the everyday needs of local citizens. He recognized a need to improve this sector by introducing a “super app,” which is an app that has the functions of many apps within it. GoJek is a single app that allows its users to order food, find transportation, make digital payments, shop, have access to hyper-local deliveries, get a massage, and experience two dozen services. The app’s GoRide, transportation service, is able to provide better access for commuting and allow for ojek drivers to have greater access to customers. There are more than 2 million driving partners spread across 203 cities and districts in Indonesia. By providing professional training and employment protection for previously unemployed workers, GoJek improved the country’s societal welfare by creating jobs for locals. GoJek contributed an estimated 9.9 trillion rupiah to Indonesia's economy. GoJek’s efforts to increase incomes for drivers and previously unemployed people has had ripple effects in bridging the gap of transportation with innovative technology. GoJek is able to create decent work opportunities, economic growth, a reduction in poverty, and industry innovation.