Economic Policy of Transportation Network Services in Indonesia

Nowadays, information and communication technology and the lifestyle of the citizen, especially in big cities, seem inseparable, including in Indonesia. Unlike countries in Europe, Indonesia is still in the process of going to digital oriented societies. Based on the latest research of Center of Innovation Policy and Governance (CIPG), Indonesia’s internet penetration growth is the highest in Asia which reaches 51 percent. Indonesia’s National Statistics Office also reports that Information and Communications Industry has been growing rapidly (more than 8% per year) for the last five years.

We can see many Indonesian youths try to grasp this momentum by working or creating technology-based start-up companies. One of these Indonesia’s companies that has significant impact in the societies is called Gojek. Gojek, established in 2009, is Uber-like company that provides network services for hiring vehicle and delivering goods and services. This company quickly gains popularity since it offers network services for hiring not only car but also motorcycle which is unfortunately still the quickest and cheapest transportation in Indonesia.

Today, there are two major companies (Gojek and Grab) that provide the same services. Not all parts of the societies are happy with the existence of those companies, the conventional transportation (non-application-based transportation) that choose not to join those companies lose their market. They demand the government to regulate those companies. There are two main demands, regulate the tariffs and the quota of the application-based transportation. More detailed:

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