Domination of Transportation Network Companies (TNCs) in Indonesia: an Indonesian Case

This publication was intended to provide evidence on the joint research activities between institutions (IULI & Universitas Pembangunan Jaya), and across fields of study (Business Administration & Accounting)

ABSTRACT : The online-based transportation companies are firms that connect prospective passengers with drivers via the smartphones’ applications. The online-based transportations have emerged as the basic necessity in much of the daily life of people. Since the first emergence of the online-based transportations, those firms have provided much assistance to the society in the metropolitan areas to do their routine activities. Today, in Indonesia there are a few of online-based transportation companies, such as; Uber, Go-Jek and Grab. Though the online-based transportation companies with their innovativeness have altered the playing field of the transportation industry, problems remain noticeable, especially from the perspective of competition with the taxi companies, and the legal issues in various countries. This is due to the disruptive innovation of the online-based transportation companies, which have obviously shattered the prevailing regulations on public transportation. In Indonesia, taxi drivers have performed demonstration and public rallies to push the government to quickly revise the regulations on public transportation. The implementation of the surge pricing of the online-based transportation companies have proven to allow drivers’ estimates on passenger demands. The same is true for potential passengers. They can decide as to when they would place orders. This paper seeks to qualitatively elaborate how the online-based transportation companies have grown and become the competing choice of Indonesian residents, by pushing aside the long-domination of taxi companies. This paper also tries to elaborate on how has the online-based transportation companies responded to changes in government regulations. Highlights are also obtained from the American-based online transportation companies, which may be used as considerations for the online-based transportation companies in Indonesia.

Keywords: transportation network companies, ride-sharing, Go-Jek, Uber, Grab, Indonesia, surge pricing, legal status, taxi, information and communication technology
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