Guest Post by
Would you hop onto a scooter with a stranger? An act that would seem crazy just a few years ago is now mainstream in many parts of the world. It’s weird to remember a time before ride-sharing. Uber has become a verb. As Uber rapidly expands and plots world domination, it’s met surprising success in some geographies and equally surprising resistance in others.
For every successful Uber there’s a graveyard of obsolete apps, some stillborn, some knocked out by the competition (RIP SideCar). One key to survival is identifying unmet customer needs and providing a viable solution where there’s little or no alternative. This seems like a no-brainer, but the real challenge is to do this in a unique way within a specific market context. Fitness within a market context, not a vacuum, is what causes a business to soar or sink, especially as markets grow highly competitive and oversaturated (such as in ridesharing). This notion of “fit within a market context” has given some ridesharing startups a home court advantage in Asia.
Indonesia’s first “unicorn” startup, GO-JEK, is a business that checks those boxes. It appeals to customers with unmet needs in a very specific market context. Namely; the jam-packed, jungle-rules, no holds barred streets of Jakarta. Yes, GO-JEK is Uber-on-a-scooter, but what really gives GO-JEK its edge is that it’s so uniquely Indonesian.
The app’s birthplace, Jakarta, while a bustling, vibrant capital, much like Kuala Lumpur and Bangkok, lacked adequate public transportation, or convenient access to transportation-based services like food delivery. Moreover, its roads were plagued with bumper-to-bumper congestion all day long. GO-JEK’s founder, Nadiem Makarim, a native Indonesian, was all too familiar with these problems and recognized that cars weren’t the solution to Indonesia’s transportation woes, cars were the problem. He also noted that, while Jakarta’s extreme traffic was endured by people who could afford cars, people who couldn’t afford cars and didn’t mind a little adventure sometimes hired an ojek – an unmetered, and often unlicensed, motorcycle taxi that weaves in and out of traffic. So Makarim started GO-JEK as a 20-driver strong motorcycle-taxi ride-hailing service while paying homage to the humble ojek in the company name. This idea may not appeal in New York or Sydney, but in Jakarta it was a hit. GO-JEK had found its fit within a unique and nuanced local market context.
GO-JEK’s growth illustrates the importance of not merely catering to a general demand, but tailoring an approach to specifically target local consumer culture. The recent regional triumph of Grab (a competing ride-hailing app in South-East Asia) echoes GO-JEK’s lessons. Grab customized its features for niche local markets. For example, in places like the Philippines and Indonesia, where cash transactions are still the norm, passengers have the option of paying with physical currency, which also appeals to drivers. Considering the diverse languages and dialects spoken across its regions, Grab also designed its chat feature to include automated translation so riders and drivers could communicate more easily. Demonstrating a deeper understanding of the local market can be the crucial detail that sways customers to one app or another. In contrast, Uber is nearly identical across its geographic markets.
GO-JEK used its home market knowledge to not only jumpstart its platform, but to also expand into untapped industries.
In a CNBC interview, Makarim expressed his vision of a “platform that fixes things” that accounted for the growing preference in Asia for “one-stop shop” apps. By first solidifying its consumer base, and building business networks, the company made sure that it had a firm foundation to stand on before branching out with their ambitious all-in-one approach, after which it simply needed to apply the same business strategy, and incorporate these new offerings into their interface. Grab had previously employed a similar strategy that yielded promising results. Rather than investing the time and resources to develop new services from scratch, they partnered up with companies that already had the experience and existing infrastructure. By collaborating with, instead of upheaving local businesses, GO-JEK and Grab ingratiated themselves with the communities they operate in.
However, as with any innovation that grows to dominate a market, GO-JEK is not without its critics. Ride-hailing apps like GO-JEK and Grab are still disparaged for disrupting conventional taxi services, although to a much lesser extent than Uber. Part of what allows these two regional operators to avoid the same quagmire of controversy as their foreign-competitor is their rapport with the locals, working with governments to discuss regulations and addressing the concerns of the public. For example, after the angry protests of traditional taxi drivers about ride-hailing apps stealing their business, GO-JEK announced a partnership with Blue Bird, the largest taxi operator in Indonesia. When GO-JEK was once banned by the Minister of Transportation as part of an effort to crack down on ride-hailing apps that “didn’t fulfill the requirements for being public transportation,” Indonesians and tourists alike immediately took to the Internet to champion a #SaveGojek campaign, citing that the service helps more than harms by reducing unemployment and traffic jams. President Widodo reversed the ban the very same day. GO-JEK’s conscientious efforts to listen to its customers, coupled with its mindset that social welfare and market efficiency aren’t mutually exclusive, have boosted its reputation.
Throughout its undertakings, GO-JEK’s continued mantra of corporate responsibility to the local communities helped it further build its brand.
GO-JEK’s rhetoric of “giving-back” and striving to “increase driver’s incomes, and ensure a better a standard of living for them and their families,” seems like a stark contrast to the mission statements of the American-based Uber and Lyft, whose key marketing pitch is that their apps let you “be your own boss.” With Uber embroiled in controversy from the onset, GO-JEK seems to be going the extra mile to tout its focus on empowering local communities and boosting economic opportunities. It appears to embrace the notion of feeling good about doing good, and how critical that messaging can be to a region’s acceptance (or not) of a ridesharing platform.
GO-JEK further matched its market context by not only emphasizing the needs of its customers, but its workers as well.
On-demand services aren’t one-sided; they’re a whole ecosystem of symbiotic relationships between a customer base and a workforce. In order for these apps to thrive, they need balanced networks of both. With ride-sharing/hailing services, a shortage of drivers on the road means that consumers are hit with longer wait times, or “surge” pricing, which leaves them disgruntled and more likely to turn to more reliable alternatives. To avoid this, on-demand service companies need to be responsive to the needs of its employees as well, and provide enticing incentives for to join–and stay– with their service. Uber and Postmates in particular are struggling to draw in and retain drivers with bonuses and benefits to supplement the lack of unionization and inconsistent workflow as they currently do not provide insurance or reimbursement for gas. As part of their social mission, GO-JEK demonstrates their commitment to improving the lives of its employees by providing “access to health and accident cover, financial services and insurance, as well as affordable automatic payments and many other benefits,” like giving drivers who could not afford smartphones loans to purchase one. Learning a few lessons, perhaps from Uber’s controversies, has made a reputation for being “local driver friendly” a clear focus of GO-JEK and Grab’s messaging.
GO-JEK’s rise from homegrown startup to Unicorn has been encouraging for emerging markets in general, especially where home court advantages can be seized. However, now GO-JEK itself has begun an aggressive global expansion strategy, starting with Vietnam, Thailand, Singapore and the Philippines. As GO-JEK and Grab suddenly find themselves the foreign new entrants rather than the local incumbents, it will be interesting to see if they’re successful in adapting to new local market contexts themselves.