Diversified conglomerate Astra International president director Prijono Sugiarto (second left) and ride-hailing app giant Go-Jek president and co-founder Andre Soelistyo (second right) sign an agreement in Jakarta recently, as Go-Jek CEO and co-founder Nadiem Makarim (right) and Astra International director Bambang Widjanarko Santoso look on. THE JAKARTA POST
Indonesian ride-hailing decacorn Go-Jek is expanding its operations by forging partnerships with Astra International and Mitsubishi Motors, respectively the first and second largest automotive companies in the country.
Go-Jek and Astra inaugurated on Thursday their joint venture company Go-Fleet at an auto show in Tangerang, Banten. At the same event, Mitsubishi chairman Osamu Masuko told reporters the automaker would “explore mobility solutions” with the ride-hailing company.
The moves come shortly after Mitsubishi announced on July 8 an investment into Go-Jek at an undisclosed amount, while Astra announced in March an investment of $250 million. Both sets of funds went to Go-Jek’s Series F funding round.
In two separate statements, Go-Jek described its partnership with Astra as a means of consolidating its presence in Indonesia, while with Mitsubishi, which has factories in Indonesia, the Philippines and Thailand, it is strengthening its presence in Southeast Asia.
Go-Jek cofounder Nadiem Makarim said the joint venture was “a collaboration and combination between two leading homegrown companies that will push Indonesia’s digital economy”.
Meanwhile, Go-Jek Group president Andre Soelistyo said Mitsubishi’s investment was “a testament to the strength of Go-Jek’s vision to use technology as a way to improve the everyday lives of people in Southeast Asia”.
Go-Fleet, a joint venture enterprise of which Astra owns the majority of shares, describes itself as a “mobility solution” as a car rental service for ride-hailing drivers registered with Go-Jek.
Go-Fleet president director Meliza M Rusli told reporters the company covered car instalments, vehicle insurance, health insurance and maintenance costs for drivers in exchange for a 1.18 million rupiah ($84.86) weekly rental fee.
The company also plasters the vehicles in its fleet, which comprises Daihatsu Xenia and Toyota Avanza multi-purpose vehicles (MPVs), with advertisements to generate additional revenue.
Drivers still bear petrol costs and commission fees on orders in addition to bearing a recurring 1.5 million rupiah commitment fee every six months. The fee will likely be discounted for loyal drivers.
“The plan is we’ll have up to thousands [of cars] this year focused on Greater Jakarta. Going forward, we will look into opening operations in other cities outside Greater Jakarta,” said Meliza.
The average Go-Jek car driver in Greater Jakarta earns around 1.5 million rupiah each week, according to a University of Indonesia survey. Under the Go-Fleet scheme, such drivers would earn a profit of 320,000 rupiah each week, excluding petrol costs. The figure falls well short of the city’s minimum wage of 3.9 million rupiah each month.
However, Meliza added the company “hopes, in the near future, to share advertising revenue with the drivers” but did not state the proportion of revenue for drivers.
Meanwhile, Mitsubishi declined to reveal details of its partnership with Go-Jek, saying only that it would leverage the partnership to expand its presence not only in Indonesia but also in Southeast Asia.
Go-Jek, which currently operates in four Southeast Asian markets, is the region’s second largest ride-hailing company after Singapore-based Grab, which operates in eight markets.
“Regarding Go-Jek, we are still in the area where Mitsubishi is investing in the company. How this will turn out, we’ve just begun looking into it. There’s nothing concrete yet but, of course, there are many possibilities,” said Mitsubishi Indonesia director of sales and marketing Irwan Kuncoro.
Mitsubishi, having sold 80,929 vehicles, gained a 16.8 per cent market share of domestic car sales in this year’s first half, according to the latest Association of Indonesian Automotive Manufacturers (Gabungan Industri Kendaraan Bermotor Indonesia, Gaikindo) data.
Mitsubishi was only outpaced by Astra, which holds the immensely popular Toyota and Daihatsu brands, with a 53 per cent market share of domestic car sales in the first half.
However, Mitsubishi’s successful Xpander MPVs have been eating at Astra’s market share since the car’s introduction two years ago. The Japanese automaker’s sales increased 60 per cent from 121,395 cars sold in 2017 to 194,331 cars last year, largely due to the Xpander. THE JAKARTA POST/ASIA NEWS NETWORK
