The Impact Of Ride-sharing Economy On Taxi Industry In Indonesia

Ride-sharing is one sector of the sharing economy business model that has disrupted many traditional industries such as transportation,retail,logistics,food and beverage,finance,and communication.The basic idea of the sharing economy is sharing underutilized assets from spaces to skills for monetary benefits or for free.Three stakeholders involved in the transactions: the platform company that provides an application to match the supply and demand,the consumers who need the goods or services,and the providers who provide the goods and services.The simple marketing chain reduces the production cost in this business model.Therefore they can offer a lower price and promotion to attract more consumers.The important drivers of the rapid growth of ride-sharing are technological advances such as GPS,smartphones,social networking and cloud computing.The ride-sharing business model usually associated with Uber,as a pioneer in the business.The similar business model then emergence in many countries such as Grab in Singapore,Ola in India,Didi in China,and Go-Jek in Indonesia.The rapid growth of ride-sharing rise a competition and protest against their development in many cities around the globe such as in Australia,Paris,New York,London,Rome,Berlin,and recently also in Indonesia.The legal issue and unfair competition become the main background of the protest.Despite all the protest in many countries,the potential benefits of the sharing economy are high.The size of the global sharing economy for five sectors is estimated to increase from USD 15 billion in 2014 to USD 335 billion by 2025.There is some evidence of cross-border investment opportunities brought by such innovations.The disruptive business may provide new opportunities to revitalize micro-enterprises and provide new sources of income for the government.However,any misguided policy and regulation may remove the potential benefits of the business innovation.This paper uses qualitative methods to study the impact of the ride-sharing economy on taxi industry in Indonesia.The paper also compares the development of the sharing economy in the European Union and China to get a lesson learn and global view on this topic.The study reveals some impact of the ride-sharing on taxi industry,employment,and also the consumers.It has impact Blue Bird,the biggest taxi company in Indonesia,in three main areas: fleet utilization,occupancy,and driver costs.The company decrease their business expansion and increase the driver’s cost because of the high turnover of drivers in the company in the last one year.They also create and improve an application to order the taxi services.Another strategy taken by Blue Bird is making a collaboration with one of the ride-sharing platform,Go-Jek Indonesia.Another significant impact of ride-sharing is it provides many jobs opportunities that accommodate much unemployment in a broad range of education background.The innovation offered by ride-sharing economy increase benefits for consumers by providing an alternative for better quality services of public transportation.The Government of Indonesia responded to this phenomenon by published a regulation,but there are still many issues,and challenges remain unsolved in the regulation.Learn from other countries;this paper suggests that the Government of Indonesia should conduct a comprehensive study on the sharing economy to get a better information as a basis to create a proper policy and get the advantage of this business.