Ride-hailing in Indonesia began with the arrival of Gojek, a motorcycle ride-hailing call centre in 2010. Later then in 2014, Grab, a ride-hailing app from Singapore, started their market in Indonesia on June, shortly followed by Uber on August 2014. Considering that Uber is the biggest company in the world, they only had 8% users compared to Grab and Gojek which are 33% and 56% consecutively. Unfortunately, Uber decided to leave Southeast Asia market in the late 2018, resulting in a massive expansion for Gojek. Thus, Gojek is definitely a winner in this competition because it shares the highest users and has benefitted as the first mover advantage.
Originally started from two services in personal mobility and freight delivery, now Gojek has 21 services divided into six categories which are Transport & Logistic, Food & FMCG, Payments, Daily Needs, News & Entertainment and Business. All the service expansions mentioned, resulting on Gojek to be called as Super App, representing a new class of mobile applications that make users wonder how they ever lived without the app.
Development of Ride-Hailing Mobile Application in Gojek
Gojek began its journey as a motorbike ride-hailing call centre in 2010 in Jakarta, Indonesia. The presence of 1.3 million private cars, 2.6 million motorcycles and unreliable 800,000 buses and lorries on the roads of Jakarta illustrates the traffic volume circulating within the city. Jakarta has relatively limited road space with less than 10% of its surface area while 20-25% is the international standard for urban areas. Thus, Gojek’s main service was to connect consumers to courier delivery and two-wheeled ride-hailing service in order to reduce the private vehicle usages and stress-free mobility.
Search and Selection The innovation of a ride-hailing mobile application from call centre technology in Gojek was a collective and social activity that involves interaction between different actors. It was the results from an interaction-based approach among drivers, customers, suppliers and the company itself. However, in In the first five years of Gojek’s journey using a call centre reflected high uncertainties in the reality. Mulyono, the first ojek driver who joined to Gojek in the interview from CNN Indonesia said that it took 40 minutes for him to proceed the order. The complex process of having an order from the customer via call centre, the difficulty of finding the pick-up point because there was no real-time online map (e.g. Google Maps) available at that time, and other external factors such as the unwelcoming reaction from fellow ojek drivers who felt their livelihood has been taken from them, had taught Gojek to develop a better technology. Thus, in the search stage, the development of a ride- hailing application by ‘social construction’ where the society has an important role to recognise new opportunities and multiply possibilities of recombination that are constituted in social process.
Referring to business model, Gojek implements two-sided market where two sets of agents (drivers and customers) interact through an intermediary which in this case is a ride-hailing application. Even before the launch of the mobile application, customers and drivers were connected through a call centre as the intermediary. The diffusion between actors or members of a social system and the technological innovation have been established in both platforms, call centre and mobile application. For instance, customers learned that it only needs a call centre number to get a driver right in front of their house rather than to walk to main road to get a driver. In addition, customers also discovered that using such technologies cost them less than the previous way of finding drivers. From drivers’ perspective, they gained knowledge that it is better to have a platform where they can just receive the order and pick up the customers with high certainty to earn more money rather than waiting in their shelters without certainty to get a single customer in a day. The combination of the social structure, the learning process of the new technologies and the diffusion are very critical to the way of a ride-hailing mobile application is perceived and adopted. Between Gojek and its platforms, the path dependency of the technology developments from call centre to a mobile application was a result of self-reinforcing mechanisms. In the industry-level, self-reinforcing mechanism of ride-hailing mobile application was addressed by recognising development patterns that are common to its industry actors.
After five years of operation using call centre as the main technology, Gojek finally launched a mobile application in 2015 with three main services which are “GoRide” – cars and motorbikes ride-hailing service, “GoSend” – a courier delivery service from one person or place to another person or place, and “GoMart” – a courier delivery service from a convenient store and supermarket to customers. The launch of the new mobile application and its new features showed that the selection processes implied prioritisation of ride-hailing mobile application over the alternatives. Moreover, path dependency and self-reinforcing mechanisms have been devoted in a context where competition is the only possible relation between various paths and the main possible outcome is a lock-in where the only potential path remains in the end. Because of the mechanisms of self-reinforcement of Gojek mobile application is very structural and has a wider positive network externalities compared to its competitors (e.g. conventional taxi and ojek), the possibility of a lock-in as the outcome is very high in the transportation industry.
Technology Brokering Transferring potentially valuable technology, a ride-hailing mobile application to other industries such as food retail, postal service, consumer goods and transportation, can lead to significant economic and competitive changes, however, knowledge exchange discrepancies across market boundaries frequently prevent this diffusion. In comparison to the incumbent providers, conventional taxi and motorbike service also known as ojek in Indonesian, where they do not use a mobile application to pick up their customers, Gojek successfully fill the “structural hole”, a gap in he information flow between subgroups which are niche customers and service providers in a larger network. By introducing the three services which are mentioned above as solutions to the customers, Gojek serves as a technology broker and creates new products in the markets that are original variations of existing knowledge from different industries.
Development of Super App in Gojek
After the launch of a ride-hailing mobile application in 2015, Gojek has taken over the ride-hailing niche market in Indonesia. In the first month of its mobile app launch in June 2015, as many as 700,000 completed orders had been placed, a number which grew exponentially to 20 million in June 2016. It was almost double the 11 million reached in March 2016. The sudden inclination in June 2016 was due to the new online payment feature that added in Gojek mobile app called GoPay. This online payment then became the key feature for the development of Gojek’s super app and the starting point of lock-in, as well as the standard of online platforms’ regulation in Indonesia.
Super App To be considered a super app, a mobile application needs to successfully operate at least two functions of logistic/hyper-local delivery, commerce, payments and social. In 2016, Gojek’s ride-hailing mobile application achieved three of these, making it the first of its kind. The aim was to grow rapidly once it had a buy-in from customers and enhance the dependability to multiple services. Gojek expanded its services in the end of 2016 into eight services and in 2019 they had a multi-services platform with six main categories, those being: transport and logistic, food and FGMC, payments, daily needs, news and entertainment, and business. Gojek now has 21 services within its super app.
Knowledge Sharing The successful innovation of Gojek’s super app is the result of diffusion of knowledge and collective learning from the embeddedness of the firm in localised networks. In Gojek, there are two main teams that have different responsibilities in science and engineering. The growth team consists of multiple small cross-functional teams formed by a growth manager, developer, UI/UX writer and designer and data analyst. Their core responsibility is mainly related to data science where they have to study a massive amount of data that has been extracted from the super app. On the other hand, the Data Engineering team (DE) consists of software engineers who are accountable to create a data infrastructure across all Gojek’s products.
Knowledge transfer in the growth team is implemented once the product is already a market fit, in that it is able to solve a problem in the market. The growth team needs to optimise the experience of the users when they use the product and expand the opportunities to reach its metric’s goal, which in this case is the number of completed orders. The best way to achieve the goal is to reduce friction (i.e. where an order is not finished by customer nor driver) and accelerate the product value that is perceived by customers.
Each of the growth team members is obliged to explore the probabilities and opportunities of the product’s value with their tacit knowledge and possess the know-how to test the users’ activities that they want to target. Once the exploration is complete, the results will be reviewed and shared with the rest of the team as implicit knowledge, then to be codified into an automation system that will completed by data engineering team. Due to the massive amount of data they have to process every day, it is very important to automate everything from deployment to infrastructure, thus, the DE team can push features faster without causing disruption to the product development.
Innovation Diffusion When the Gojek mobile app still focused on one function for ride-hailing, the networks that were involved in the social structure was smaller than it is now with its super app. As per 2019, Gojek’s super app ecosystem did not only involve the participation from drivers (or now called driver-partners), but also various merchants which consist of small to medium enterprises and service providers from GoLife (a service category that offers massage, cleaning service, personal beauty care, and auto care for maintenance) partners. Within just four years of its operation, GoFood has established a mutual relationship with 400,000 food merchants, while GoLife has partnered with more than 60,000 services providers, not to mention its 155 million users across the region.
Due to the existence of a massive customer base and one of the functions of a super app being to enable the users to communicate with others, Gojek’s super app has been easily adopted by other customers and increases the value of the technology. Even though the network effect is important to the diffusion of innovation, ‘standards’ are crucial to determine the accelerating process of diffusion.
Gojek’s super app alone cannot be interpreted as a standard if it is compared to a physical product. However, one of its features, GoPay, is becoming a standard for mobile payment in Indonesia, because of its availability in almost all the online platforms that require a payment, as well as offline merchants. Moreover, funding supports from lead investors play a crucial role in winning standard battles over Gojek’s competitors by ‘burning’ the money into variations of promotions and campaigns to entice new customers.
Super App Impacts
Unlike the social construction that had impacted in the development of Gojek’s ride-hailing mobile application, super app works the other way around, where the technology shapes the way society thinks and acts. Technological determinism in super app builds interaction among the relevant social groups, which are customers, merchants, drivers, service providers, and even the government. As mentioned in the knowledge sharing section about the automation system that is built by the DE team, the technology in super app develops autonomously and determines societal development to some degree.
Technological Revolution and Techno-economic Paradigms A technological revolution, in general, can be identified as a major upheaval with the potential to create a wealthy economy, open vast space for growth possibilities, and provide a new variation of related technologies, infrastructures and organisational values that significantly improve the efficiency and effectiveness of all industries and activities. Gojek’s technological innovation in super app can be categorised as a technological revolution in Indonesia. It increased the average monthly income of drivers by 15% a year after becoming a unicorn start-up (a private company with a valuation over $1 billion) in 2015.
Apart from drivers, GoFood and GoMart (products of Gojek’s super app) have changed the way SMEs market their products, from opening a physical store into online platforms. These features are specifically targeting food and beverage products that are impossible to sell in common online platforms because of its conditions. After partnering with GoFood and GoMart, SMEs receive up to 345% more sales. The changes emerge a techno-economic paradigm, where the use of new technologies as they diffuse multiplies its impact across the economy and socio-institutional structures.
In addition to socio-institutional structure, Gojek’s super app has pioneering the National Non-Cash Movement, by releasing its mobile payment GoPay in 2016 and became the standard of the non-cash payment using QR code and peer-to-peer transfer to accelerate the transformation towards a cashless society in Indonesia.
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