55

The Leap of GO-JEK:

Unfolding A Unicorn Startup Journey1

Agus, Anna Amalyah, Arafah, Anjani Yaumil,

Suprayana, I Kadek Oka, and Sari, Monica Puspita2

The world is currently moving at a very tremendous pace. It seems like just last
year, where the only option for private transportation are stopping taxis by the
highway or finding the closest motorbike taxi shelter. But now, not only it's just
one-click away to pick a ride but you can even order foods or movie tickets as
well. The name of the application is GO-JEK.
We first analyze GO-JEK’s SWOT and Porter’s Five Forces to gain insight on
how GO-JEK are trying to win the competition. After that, we conduct a cross-
industry highlight comparison to better understand how massive GO-JEK is.
Here, we gain insight that GO-JEK is actually not only a business solely for
profit, but is a business of love that aimed to create a change through making
social impact. As their success factors, they successfully utilizing their first-
mover advantage, understanding of local context, and advantage of weak
transportation infrastructure to be able to become this great.
However, they continuously facing many challenges both from internal and
external. Therefore, they have to keep involving in order to survive. They able to
turn a slight opportunity into bigger ideas and execute them nicely. They are also
very agile in their strategy and innovation which is the most important
requirements in this fast-paced industry. GO-JEK managed to push their way
through and even received funding of $2.1 bllion in total as of 2018 from great
companies such as Google, Temasek, Tencent Holdings, Sequoia, and many
others. As for now, they plan to soar further into international market by
expanding. For the closing of this paper, we give some recommendation for GO-
JEK future.

Keywords: GO-JEK, Online Transportation, Unicorn Startup,

Financial Technology, Regional Champion

1
This case was selected as an outstanding presentation award at the AAB Competition 2018
2
Agus, Anna Amalyah is a lecturer at University of Indonesia
(email: anna.agus@gmail.com)
Arafah, Anjani Yaumil is a Management Student at University of Indonesia
(email: anjaniyaumil@gmail.com)
Suprayana, I Kadek Oka is a Management Student at University of Indonesia
(email: okasuprayana@gmail.com)
Sari, Monica Puspita is a Management Student at University of Indonesia
(email: damanhurimonica@gmail.com)

ACADEMY OF ASIAN BUSINESS REVIEW ISSN: 2384-3454 / 19 / $10.00

Vol. 5, No. 1.JUNE 2019 ⓒ Academy of Asian Business 2019
56 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

GO-JEK which name came from “Ojek” (the local term for motorcycle taxi) is a
mobile application providing various services including transportation, logistics,
mobile payments, food delivery, and many others. As the tagline says, “An Ojek
for Every Needs”. GO-JEK services are divided into three categories. They are
GO-RIDE in the form of ride-sharing services using motorcycle and car, GO-LIFE
in the form of household services from food delivery, shopping, massage, cleaning,
etc, and the last is GO-PAY, their own growing payment system that still hiding
it’s potential.

FIGURE 1
GO-JEK Application Interface

Source: Screenshot of GO-JEK Application

The Journey Began

The inspiration came from a man’s frustration. It’s how hard it is for him to find
a motorcycle taxis when he need it, but it’s the exact opposite when he doesn’t
need it (Damanik, 2018). The man is Nadiem Makarim, born in 1984, a consultant
for McKinsey & Co. at the time, but recently better known as a rising unicorn’s
Founder and CEO of GO-JEK.
Using motorcycle as a form of online transportation came from Nadiem’s habit,
as he uses motorcycle taxis daily to get between places. He prefer motorcycle
because in Jakarta, the 12th most congested City in the 2nd most congested
Country in the world (Inrix, 2017) he would never get anywhere using a car.
 The Leap of Go-Jek 57

Unfortunately, once his Ojek drivers charged at roughly Rp50.000,00 (~USD 4) for
less than a 3 km trip, a ridiculously expensive fare compared to a regular car taxi’s
fees of Rp 3.600 per km (~USD 0.3). It is caused by orders that hardly came to
individual Ojek as they wait collectively in a certain place, thus the drivers decided
to charge more to cover for their lack of income.
Nadiem’s main idea of developing GO-JEK is to solve the latter problems while
bringing social impact. There are three main problems. First, how 70% of the time,
conventional motorcycle taxis are idle, which is a waste in economic value. Second,
an asymmetric information in conventional motorcycle taxis pricing. Third, the
severe traffic problems in Jakarta, where you will never get anywhere with a car
(Kevin, 2012).
By using GO-JEK application, supply and demand problems are cleared as
customers are easier to order and drivers order are increasing. GO-JEK will
determine the fare and implement sharing economy to erase asymmetric
information and increase driver’s prosperity. It can also solve the traffic problems,
as it’s easier to get past through traffic by using motorcycle.

FIGURE 2.
GO-JEK Main Services

Source: Author’s Analysis based on Tech in Asia

58 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

The Milestones -- Brief History of GO-JEK

The Beginning Era. Started in 2010 by Nadiem, Michaelangeo, and Kevin, GO-
JEK only operated with a call centre and a fleet of 20 motorcycle riders. As for the
operational cost, Nadiem used his savings. Orders only come from friends and
family as people haven’t trusted GO-JEK services yet. Things began to change
when they won GEPI awards and increased their branding which leads to more
orders.

FIGURE 3
GO-JEK Highlights

Source: Author’s Analysis based on Various References

The Tremendous Growth Era. In 2014, Uber popularity is rising thus triggered
investors to invest in GO-JEK. Nadiem whom worked at Zalora then decided to
resign and focused full time in GO-JEK. By January 2015, GO-JEK finally
launched it’s Android and iOS apps with additional features aside from
transportation such as courier and shopping services. In April 2015, they’ve
already had more than 2.200 riders, expand to Bali and Bandung, and also adding
GO-FOOD to their services.
On May 2015, the competitive ride sharing landscape start changing with the
entrance of Grab to Indonesia. Grab, owned by Anthony Tan, are actually
Nadiem’s friend back in Harvard. This triggered GO-JEK’s survival instinct
 The Leap of Go-Jek 59

(Sarkhel, 2016). They realized that they need to do something in response or

otherwise be crushed. Therefore, by October 2015, GO-JEK have added GO-
GLAM, GO-MASSAGE, GO-CLEAN, GO-BOX, GO-TIX to their services and
managed to acquire funding from Sequoia capital and several other venture capitals
to fight Grab. On April 2016, GO-JEK launches it’s GO-PAY to convert users to
cashless environment and also to provide better user experience (Marzuki, 2017).
The Investors Funding Era. From 2017 to 2018, GO-JEK’s received another
series of investment from KKR, Warburg, Pincus, Farallon Capital, Capital Group
Markets, Tencent Holdings, Google, Temasek, PT Astra International, and PT
Global Digital Niaga adding up to USD 2.1 bio (Ellis, 2018). GO-JEK also acquire
three of Indonesia’s financial technology firms, which are Kartuku, Midtrans, and
Mapan to provide better services in their GO-PAY.

FIGURE 4.
GO-JEK’s Main Investors

Source: Reuters

The Expansion Era. Having received so many investment from great

companies, GO-JEK have to answer their expectations. Therefore, they finally
decided to expand to four countries. As for now, GO-JEK application has been
downloaded 10.000.000+ times with 4.4. rating from Google Play (not included
from App Store yet). Meanwhile from GO-JEK driver application, it has been
downloaded 1.000.000+ times with 4.1 rating from Google Play (not included from
App Store yet) and the drivers are operating in 63 cities in Indonesia as for now.
Orders are keep growing, by the end of 2017, they have 15 mio weekly active
users, 900.000 drivers, 125.000 partner merchants, and more than 100 millions
transaction completed. They are currently a regional champion now and planned to
60 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

expand overseas for their next step.

Here is the figure of GO-JEK milestones for better understanding :

FIGURE 5.
GO-JEK Milestones

Source: Author’s Analysis based on Various References

 The Leap of Go-Jek 61

Current Position

Company Analysis (SWOT Matrix)

TABLE 1.
GO-JEK SWOT Matrix Analysis

Source: Author’s Analysis

Strength. Being the pioneer in Indonesia gives GO-JEK an advantage in the

network of drivers. On the other hand, being the first in the market and their local
start-up branding makes many people choose GO-JEK just because it’s from
Indonesia. Along with their diverse service offering, ranging from ride to bill
payment really plays a big role in their rapid growth. While Grab has just started
entering the food delivery market, GO-JEK has acquired a massive network of
shop in their option. Everyone must be agree that GO-JEK has given the luxury
that no one thought they wanted.
Weakness. While the portfolio of product offered by GO-JEK can create a
barrier to entry for their competition, it can easily be passed by a financially strong
competitor. Price is a very sensitive area for Indonesian, if a competitor can spend
a large amount of money for discount long enough, they can steal the market that
GO-JEK has managed to build. This is exactly what happened when GrabBike first
entered the market, they offer a never ending discount that creates a price war so
severe the government needs to intervene.
Opportunity. As a platform they can provide fast on-demand services as there
are many opportunities to expand more than the retail customers market that have
been explored by GO-JEK. For example, B2B market has yet to be touched by GO-
JEK. A fast on-demand courier service is what a corporate or business client would
need. A corporate can utilize them for sending document rapidly, and e-commerce
business can send their product immediately for a premium.
62 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

Threat. Currently plays in an unregulated area in Indonesia, any regulation that

could emerge in the future might bind and limit GO-JEK’s ability in doing their
business. But the risk is minimal, as they have gained much support by both the
consumer and the drivers who consider the services to be essential. Even so, the
fact that GO-JEK changes the public transportation landscape can ignite protest by
a more traditional transportation provider.

Meso Analysis by Porter’s Five Forces

Moving forward to a bigger perspective, we utilize Porter’s Five Forces Analysis
to see the forces affecting the company’s decisions. We analyze the level of forces
by categorizing on how much they affect the company, Low if the forces are
negligible, Medium-Low if the impact are not severe and unlikely to happen,
Medium if the impact is un-severe but likely to happen, Medium-High if the impact
is severe but unlikely to happen, and High if the impact is severe and likely to
happen.

FIGURE 6
Porter’s Five Forces Analysis on GO-JEK

Source: Author’s Analysis

The Bargaining Power of Suppliers (Medium High). GO-JEK suppliers are

actually their drivers as this is a company with sharing-economy principle. So, in
managing this power of suppliers, GO-JEK tried their best to keep their satisfaction
at best. Nadiem himself rides go-ride 3 times a day and go-car 4 to 5 times a week
to talk with these drivers, to listen to their complaints. This is what differentiates
them from Uber whom spent millions in promotions and price cuts. GO-JEK
focused in managing their fleets, built good relationship with them, and marketing
 The Leap of Go-Jek 63

through them (CNN Indonesia, 2018). The current competition and attention from
the government might elevates the bargaining power of their drivers by giving
them more option on how they work and get paid thus might become a threat for
GO-JEK driver fleet.
The Bargaining Power of Customers (High). In managing their customers
bargaining power, GO-JEK tried it’s best in listening to every customers
complaints. In one of his interview, Nadiem said that GO-JEK managed to become
this big because of the power of word of mouth, because customers whom satisfied
with their services will recommend them to their friends and relatives. The facts
that GO-JEK answers every comment from someone who rate their application
with only one star in App Store and Google Play, shows how they concerned about
customer’s satisfaction to prevent bad word of mouth.
Threat of New Entrants (Medium). In responding to this forces, GO-JEK used
it’s principle to always act as a startup company in a way that they need to be
flexible in responding the market and push more innovation. For example, back on
2015 as Grab enter the market, they went in with a fierce price war using
promotions. One of the answer GO-JEK came up with back then is by launching
it’s mobile payment, GO-PAY, to ease the transaction process and also providing
new user experience. Other competitor could enter in a similar way, but in the
current state they needs to have a strong financial and technology to back them up.
Threat of Substitute Products (Medium High). GO-JEK keep differentiating
themselves from others and create brand loyalty to refrain its customers from
switching. Because the core product of GO-JEK is transportation within the city,
the substitute are, therefore, quite various. They came in many shape of
transportation services such as bus, commuter rail system, taxis, conventional
motorcycle taxis, and other online transportation services. In here, the substitution
cost is relatively low for customers, therefore it’s very likely for customers to
switch especially in responding to some kind of promotion. Even so, GO-JEK is
currently winning in their branding and various services.
Rivalry Among Existing Firms (High). Kind of similar with responding to the
threat of substitutes, here GO-JEK diversified their services by adding additional
services in GO-LIFE and add GO-PAY as their means of payment to create new
user experience. GO-JEK direct competitors are currently only Grab, as this is the
same kind of company in the terms of services provided. As for the indirect
competitor, there are other public transportation such as bus, commuter line, taxis,
and conventional motorcycle taxis.
64 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

Cross-Industry Highlight Comparison

To get better understanding about how massive GO-JEK is, we compared them
with two top companies in Indonesia. Those are Unilever Indonesia, a Fast Moving
Consumer Goods (FMCG) company that currently becoming Indonesia’s largest
consumer goods producer, and secondly Bank BTN (Bank Tabungan Negara), an
Indonesian state-owned bank, which currently dominates the market share of home
finance loans in Indonesia.

TABLE 2.
Revenue Data of GO-JEK, Unilever, and Bank BTN
 The Leap of Go-Jek 65

*estimated
Source: Demographic Institution of FEB UI, BTN & Unilever’s Annual Report 2017, Linkedin

Annual Revenue. GO-JEK’s revenue as published by Demographic Institution

of Faculty of Economic and Business University of Indonesia, contribute to
Indonesian economy as much as Rp 9.9 Trillion (~USD 700.000) for the year 2017.
As for the comparing companies, taken from their 2017 annual report, the revenue
of Unilever Indonesia and Bank BTN are about Rp 41.2 T (~USD 3 mio) and Rp
19.3 T (~USD 1.3 mio) respectively. Unlike the other two, GO-JEK growth is
super fast, where they almost achieve ¼ of Unilever’s revenue that operates for
almost 85 years, whereas with Bank BTN, they achieve half the revenue that Bank
BTN took 121 years to achieve!
GO-PAY User in Indonesia. To take it a bit further with the idea, we want to
illustrate more in the scale of GO-JEK. We assume that GO-JEK users spend a
conservative amount of Rp 150,000 (~US$ 16) per month in GO-RIDE, GO-CAR,
and GO-FOOD through GO-PAY. With the number of GO-PAY user, based on the
information from Business Intelligent of GO-JEK, reaches half of all their apps
user (approximately 7.5 mio users). Which means, the amount of transaction using
GO-PAY as means of payment reach an estimated of Rp 1.13 Trillion
(~US$ 79,769) per month! It rivals Bank BTN omzet of monthly revenue that
recorded on average as much as Rp 1.4 Trillion (~US$ 98,828). Fantastic number
isn’t it? GO-JEK can catch up to the monthly omzet of the 121 years-old company
in only 8 years of operation!
Moreover, based on research done by statista, emarketer, and KPMG, the results
show that the most commonly used payment service by users, among others, is
GO-PAY with a percentage of 24.1% of all mobile payment user. It makes GO-
JEK rank in 4th behind other payment services such as (in order of most user) e-
Money that launched by Bank Mandiri in 2012, Flazz that launched by Bank BCA
in 2009, and Tcash which is not provided by a bank but by a telecommunication
company, Telkom Indonesia. This fact has made GO-JEK and especially GO-PAY
so remarkable in breaking the market and being the champion with their product
(Zaenudin, 2017).
66 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

FIGURE 7.
Most Used Digital Payment Platform in Indonesia (2017)

Source: KPMG, emarketer, and Statista

 The Leap of Go-Jek 67

Peer-To-Peer Analysis (Grab and Go-jek)

The more important point is to see how GO-JEK stacks up with their direct
competitor, Grab. As both of them are fighting in the same industry with a very
similar services. Here we will break it into a few sections:
Popularity. As we can see from the table, based on the AppStore Rank and
Google Play Rank, Grab is still above GO-JEK. Nevertheless, a recent study shows
that almost half of online transportation users install both apps in their smartphone.
With over 15 mio weekly active user, GO-JEK claims to have 50% of Indonesia’s
ride hailing market and 95% of online food delivery market as of 2016.
Services. In term of services, both offer quite a range of services in Indonesia.
While Grab focuses more on Ride Sharing and some other services, GO-JEK is a
clear winner in term of number of services they offer, ranging from Ride Sharing,
Shopping, to Mobile Payments.
Grab operate in about 100 cities in Indonesia while GO-JEK only ‘play’ in 63 of
them. Although the number is smaller than Grab, GO-JEK focuses to bigger city
and consider the surrounding area as one city. Moreover, GO-JEK is also a winner
in terms of their food service, GO - FOOD, by partnering with 125.000 merchants,
and 30,000 for other services. While GrabFood only operates in Jakarta and
surrounding city. This achievement makes GO-JEK becomes top of the list in
Indonesia with the most average Daily Active Users (DAU) and claimed as the
second busiest on-demand food delivery services in the world, right after
FoodPanda.
Drivers. On the drivers point of view, GO-JEK has it better in touching the heart
of their driver with an easier enrolment and faster wait time for their first ride.
Despite that GO-JEK has lower base pay than Grab (refer to table 3), GO-JEK
driver got almost half their income with their Point-Based incentive, which include
point for surge price and the number of trip taken for each of their services that
converts up to Rp 200.000 (~USD 15) per day. Meanwhile, Grab incentive plan
only contribute about 10% of their driver’s income. This is one reason why Grab
drivers is sensitive to customer’s promotion code as they believe it will cut through
their income and leads to drivers declining customers with promotion code.
Financials. In a financial point of view, GO-JEK got a series of funding of USD
2.050 bio along 2016 and 2017, making it valuated at about USD 4 bio as of May
2018. On the other hand Grab got a series of funding of USD 4.1 along 2016 and
2017, giving it an estimated value at about USD 6 bio as of May 2018. This
relatively close valuation is unusual knowing that GO-JEK only operates in
Indonesia while Grab operates in 8 countries in South East Asia, while it is known
that Indonesia is the biggest market for on-demand ride hailing service, what GO-
68 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

JEK has been hiding is the fact that they plan to expands to 4 countries for the next
few years.
Here’s the summary in the form of a table:

TABLE 3.
Comparison between GO-JEK and Grab

Source: Author’s Analysis from Various References

Go-Jek’s Turning Points

Taken from the milestones journey we state above, here we can highlight GO-
JEK turning points in four points:

2011: Winning GEPI awards and receive USD10.000

The very first turning point is when GO-JEK won the GEPI awards. By winning
this awards, they managed to build their brand image, making orders increased
rapidly and increased their overall confidence in the process. In addition, GO-JEK
 The Leap of Go-Jek 69

also have the chances to meet various startups that teaches them a lot of scaling
advices. A number of investors finally started to take interest in funding GO-JEK
as well. By the start of 2012, GO-JEK finally have 15 employees, 350 drivers,
4.000 customers whom most of them are repeat customers, and 25 corporate users.
This stats encourage GO-JEK to expand their business to Jabodetabek (Jakarta,
Bogor, Depok, Tangerang, Bekasi) area after limiting their operation to Jakarta at
the time.

2015: Receive Funding, encourage Nadiem to focus his full-time in

GO-JEK
For the last couple of years after the awards, GO-JEK didn’t shown any
significant growth. But, when the popularity of Uber and Grab is rising back in the
2014, many investors started to take interest in funding GO-JEK. This drives
Nadiem to finally focused full-time in developing GO-JEK. By 2015, GO-JEK
finally launches it’s application in iOS and Android platform. After only a few
weeks, it has become the most popular free application in Apple App Store
Indonesia.
This time, their strategies is to utilize every single money they’ve got from the
investors. Nadiem said that they should have the courage to take a lot of money,
spend it fast, and go broke in his interview with Tech in Asia. With the money,
they planned to use logistic as their stepping stone. This is because logistic is also a
key in e-commerce. By the logistic network they’ve built, all different business
units can be stacked together. GO-JEK answers this by expanding their services in
delivering food (GO-FOOD) and personal shopping services (GO-MART). Turns
out, GO-FOOD is so popular that their apps transactions capacity has doubled a
couple time during the year.

FIGURE 8.
GO-JEK Impact on Their Partners

Source: Demographic Institution of FEB UI Survey, October 2017

70 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

2016: Development of GO-PAY

By launching GO-PAY, GO-JEK have extended their services not only in ride-
sharing application, but also in financial technology. Nadiem said, the goal of GO-
PAY is actually to provide better user experience, as in the future they hoped that
GO-PAY can be used in other various transaction. In one of the interview, he said
that “Once you GO-PAY, you can never go back to cash.” Another noble goal is
the concern that majority of Indonesian people didn’t have access to credit cards,
so by the launch of GO-PAY it is hoped that people can have a better and easier
life.
Strategically speaking, it is a very smart move from GO-JEK, because this is a
preemptive move as their rival, Grab, haven’t utilized e-money as their means of
transaction yet. In addition, financial technology industries is currently growing in
Indonesia. Supported by the facts of ecommerce rapid growth, many investors
started to take interest in funding GO-JEK because of the existence of GO-PAY.
For example, by the start of 2018, GO-JEK received funds from PT Global Digital
Niaga as their GO-PAY services may suit their e-commerce site, BliBli.com. The
future of this platform has a wide range possibility because of this move.

2018: Expansion Plan

By entering the financial technology landscape, many investors started to see
more future in GO-JEK. Thus, this is the start of investor fundings era. In August
2016, GO-JEK received funding with total amount of $550 million from KKR,
Warburg, Pincus, Farallon Capital, and Capital Group Markets. Moreover, in
March 2017 or 7 months later, the giant technology company, Tencent Holdings,
invest in GO-JEK as part of their $1.2 billion fundraising round (Russell, 2017).
Seeing this as an opportunity in improving their GO-PAY services, by December
2017 GO-JEK acquire three of Indonesia’s financial technology firms, which are
Kartuku, Midtrans, and Mapan (Balea, 2017). Moreover, on January and February
2018, Google, Temasek, PT Astra International, and PT Global Digital Niaga also
invested in GO-JEK (Daga, 2018). Getting so much funds, it’s finally GO-JEK’s
time to answer those investors. One of the answer is to finally expand outside from
Indonesia. It is confirmed that GO-JEK will expand to four countries by using this
funding. But, what will be the future of GO-JEK?
 The Leap of Go-Jek 71

Success Factors

Before we arrive to conclusion, we can point out GO-JEK success factors based
on their milestones and our analysis of SWOT, Porter’s Five Forces, cross industry,
and peer-to-peer analysis. It can be seen that as a part of Asian, GO-JEK mainly
uses asian style here. Specifically, South East Asian as GO-JEK is originated from
Indonesia, one of the developing country in SEA. Here are the factors:
First Mover Advantage. Here, business comes first than the regulation itself.
As GO-JEK is a new and unique company where even the government didn’t have
any regulation for them, GO-JEK is actually at an advantage. As long as the
government haven’t announced any regulation regarding them, they can do as they
please. That’s why, GO-JEK have to move really fast before government
regulation make everything harder for them—which they’ve been doing even until
now. This is a unique thing to SEA, especially Indonesia as the government tend to
responds a little late to the matters, but when they did they tend to overdone it as
our ‘online transportation ban’ example before. Even so this advantage is slightly
fading as the government is starting to intervene the industry.
Understanding The Local Context. Nadiem strategy in understanding the local
context is to rides the go-ride services 3 times a day and go-car 4 to 5 times a week.
He said this is to get closer with the drivers and understanding their problems. This
is a very good relationship practices whereas by riding with them, these drivers can
complaint directly to the CEO if they have a problems. From these small interview
with the drivers, Nadiem know that some of the drivers complaint about how hard
it is to get an order on certain hour. But, aside from complaint, he also knew some
heartwarming stories such as a driver that managed to get their kids to college from
the income they got from GO-JEK.
Asian is more of a social person than individual. Therefore, it’s good if GO-JEK
principle is based on everyone happiness. As for Indonesian local context itself,
they have value of working together or “gotong royong”. GO-JEK, as a company
which main goals is for social campaign, fit this category very well. This can be
seen in the solidarity of GO-JEK drivers. When conventional motorcycle taxis
banned them, they unite and make their own shelter. They try their best not to harm
other business as we are all here both have a same goal—making money to feed
their families back at home.
72 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

FIGURE 9.
Graph of Driver’s Income & FIGURE 10 : Graph of Business Partners Transaction Volume

Source: Demographic Institution of FEB UI Survey, October 2017

From figure 6, it can be seen that driver’s income is increasing by 44% and their
spending also increase by 31% after joining GO-JEK. If compared, their monthly
income number are higher than the average minimum income in the 9 survey areas.
So, it can be concluded that the drivers prosperity is increasing after joining GO-
JEK.
Moreover, it can be seen from figure 7 that not only drivers, but GO-JEK
business partners also feel the impact after partnering with GO-JEK. From the
graph above, it can be seen that 82% of business partners transaction volume are
increased, where 85% of them experience an increase in volume by more than 5%
after partnering with GO-JEK. As expected from the pattern of drivers, the average
income of 43% business partners are also increasing.
GO-JEK is currently contributing Rp8,2 billion (~USD 5.8 mio) annually for
Indonesian economy just from their drivers revenue. As for their business partners,
they are contributing Rp1,7 billion (~USD 1.2 mio) annually. Moreover, GO-JEK
also decreasing the unemployment rate by expanding the employment landscape,
thus improving society’s income and therefore, prosperity. This is the realization of
their goals of bringing social impact, as they are not a startup that solely created for
business that generates profit only.
Weak Transportation Infrastructure. GO-JEK find opportunity in solving
developing country bad transportation infrastructure problems. As developing
country is characterized with congested traffic condition, motorcycle is a solution
to get past through traffic. Of course, if GO-JEK choose to operate in a country
 The Leap of Go-Jek 73

with good public transportation infrastructure, they will lose as people will prefer
to ride the train or busses—of course they are way more comfortable.
The Research about The Laziness of Indonesian People to Walk. The study
from Stanford University in United States reveals that Indonesian people walk an
average of 3,513 steps daily where the number is below 5,000 steps per day of
global standard. It makes conclusion that Indonesians are the world's laziest walker.
There are so many Indonesian people from various age that whenever they wants to
go out, they choose to use motorcycle although the distance to the destination point
is not very far away. Even, for going to the supermarket which is only 300m away
from their home. This fact relates to the statement before that the infrastructure
which encourage Indonesian to walk is still far from safety and comfort. The
sidewalk that often don’t work as the intended function, such as occupied by street
vendor, and the location that very near to the road activity often put pedestrian in
danger for them to walk. Moreover, the sidewalk is not accessible to every point in
the city so it makes people difficult and discourage them to walk. That fact also
become an evidence of the successfulness of GO-JEK in Indonesia where people in
Indonesia are willing to pay more money for the instant facility that GO-JEK give
to just make them safety and comfort.

Current Challenges To Overcome

Internal
The internal challenges lies in how GO-JEK have to keep motivate their
employees for continuous improvement, as their strength lies in their talent. Which
means, GO-JEK only works with the brightest minds. Here, Nadiem tries to
internalize the value of startup oriented company even though they already achieve
Unicorn level, where they’ll always have to be progressive and innovative. Besides,
it is difficult to achieve balance for both customers and the drivers. Sometimes,
what considered as satisfying in the customer’s side won’t satisfy the driver’s side.
For example, the discount promoted by GO-JEK is very attractive for customers to
use GO-RIDE, but, in other hand, the drivers suffer losses due to less income.
Application that becomes more attractive would bring in massive customers to
use GO-JEK, and thus leads to the challenge of GO-JEK to be able managing the
big data efficiently. The doubling of users has been a monthly problem for GO-
JEK for the last 3 years. From an engineering point of view it is ideal to address it
in the most efficient way, with the less amount of engineer as what GO-JEK’s head
of engineer said in an interview “we always throw talent at problem” meaning they
74 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

don’t hire many people to solve problem but only one that knows it best. But from
operations point of view, a rapid scaling up means that the need for more talent is
undeniable and to find the perfect person for every needs is not easy and took time
to do it. In the recent years, GO-JEK has opened a lot of recruitment to cover their
need for expansion and it will only getting worse as the operation expands
internationally. On the other hands, to balance their demand with a sufficient
supply of driver, GO-JEK once opened their driver recruitment in a sports stadium
to add 16.000 new drivers in only 4 days, making them bigger than the biggest taxi
services, BlueBird at the time (Freishclad, 2015). With simple requirement of only
paper document with no actual driving test, the issue of quality in their recruit is in
question.

External
Landscape of Transportation & Urban Logistic, Financial Technology, and
Service Industry. Along with the growing market of e-commerce, the demand for
shipping especially in the urban area has increased and the need for a rapid
shipping method is huge. GO-JEK with its drivers fleet is the key to answer these
challenges. It’s all in how GO-JEK figuring out where the market for logistics
leads to and capitalize its potential. Moreover, transportation infrastructure as in
Jakarta always tried to balance itself to the need of the citizen. It’s either GO-JEK
tried to grow around it or the infrastructure is built around them. From what we see,
train transportation plays really well with GO-JEK, the train cover longer distance
travel and GO-JEK to link between a shorter distance or to an exact location.
Despite having 132 millions people actively using internet, 64% of Indonesia’s
population had no access to formal banking services for the last 15 years, based on
KMPG report, so the pursue of financial inclusion is nothing new to Indonesia. In a
highly regulated industry such as banking, GO-PAY sure has a lot to do. Indonesia
as a country has just opened its hands to FinTech, especially start-up, but
nevertheless the regulation for them has barely mature. To be able to integrate GO-
PAY as a widely acceptable mobile payment solution, they have to be a liquid
currency that reach every layer of the economy. So many attempt has been made
by another company but none has managed to dominate the market as most
merchant that Indonesians trade to only accept cash and cash only, so the main
payment method won’t change. With the acquisition of 3 financial startup that
focused in online-to-offline payment system, it is remain to be seen how GO-PAY
will penetrate the cash dependent market.
Another challenge comes from GO-LIFE business line, that is GO-MASSAGE,
where from the operational itself, the masseurers provide services using products
 The Leap of Go-Jek 75

that do not have label (unlabeled products), which means no trace of inspection
from Indonesia National Agency of Drug & Food Control (BPOM). If in the near
future there is an inspection from the related agency, there would be an
uncomfortable publication for GO-MASSAGE itself. This is only one example of
how the third party services provided by their platform may effect the trust of
customers thus their branding as a whole.
Protests from Land Transportation Organization & Government
Regulation. Ever since GO-JEK operate back in the 2015, they receive many
protests act from land transportation organization (organda) which leads to the
violence toward GO-JEK’s driver in some cases. This protests which triggered due
to the less income that they get after the entry of GO-JEK. Those happen in many
city such as Jakarta, Bandung, Probolinggo, Pekalongan, and many more.
Moreover, the protest also comes from the taxi company drivers, Bluebird that
happened in Jakarta. The protest makes GO-JEK position was very cornered by the
condition that only allowed to pick up customers far away from the conventional
GO-JEK shelter. The ending of protest from Bluebird create collaboration with
GO-JEK where it makes them part of their ride-sharing services (GO-BLUEBIRD).
This challenge clearly still doesn’t have ultimate solution, instead solved by
avoiding each party. Another challenge comes through the government that
improvised regulation through Minister of Transportation Regulation Number 108
Year 2017 which regulate about Implementation of People Transportation by
Public. It regulates the completeness of document for vehicle that used for ride-
sharing and also the document for the riders. Moreover, government determines the
lowest price as much as Rp 3,500 (~USD 0.25) which means it blocks access for
GO-JEK to compete in terms of price. But, the real challenge lies in the possibility
of future tax regulation. As currently GO-JEK drivers income isn’t taxed yet. If it’s
taxed, of course the income will decrease in a significant amount. So, what will be
the driver’s responses?
76 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

Summary and Conclusion

Lessons Learned
“Momentum is a very ephemeral thing, right? It goes up and down, and if you
don’t catch it at its peak then you’ll lose it, and there’s nothing worse than losing
momentum,” said Nadiem, in one of his interview. Maybe some people see that
GO-JEK is actually just very lucky, like it’s a business that just coincidentally be in
the right time and the right place. But, that’s the thing isn’t it? They just picked up
a very critical momentum and innovate it. It’s all about execution, and they did it
before anyone else. This is the very lesson that we learned from GO-JEK journey
along this case. From their milestones, we can see how they answers their
challenges by keep innovating. When they planned to grow their business, they
hold massive recruitment in a stadium. Realizing opportunity in logistics industry,
they create GO-FOOD and GO-SEND. They also diversified their services in GO-
LIFE. For when they are facing their rival, Grab, they didn’t just keep up with price
war but also launching GO-PAY to win the competition. Which, as a result, expand
their landscape of business to financial technology. Finally, received so many
fundings, now they are currently planning to expand overseas. This shown how
strong their innovation core is.
Being a very versatile business, GO-JEK affect many aspects in our life.
Whether it’s in transportation, payment service, or even urban logistics. They also
increase people’s income and prosperity, reducing unemployment rate, and help in
improving small business transaction and development. They stay true to their
vision and mission to bring social impact and develop faster than any other
industries.
One other very key beside their capability in catching momentum, is the people
behind it. Their human resources, culture, and strong sense of good citizenship are
what make them as they are now. Their human resource are the best minds with
different backgrounds but similar purposes to give impact to societies. Their
culture is how you have to be fast and sensitive in innovation, yet keep humble and
feeling small to keep pushing your limit in creating new ideas. They also encourage
in doing what you love, as every members can choose whatever project to their
liking. Bottom line, all of this is based on a strong sense of good citizenship where
they just wanted to help each other prosper. This is what you have to be if you
wanted to be a regional champion like GO-JEK.
 The Leap of Go-Jek 77

FIGURE 11.
Summary of GO-JEK Success Factors

Source: Author’s Analysis

Recommendation
GO-JEK main challenge lies in the fact that this industry is constantly changing,
therefore to win the competition they have to keep evolving. This is heavily related
with the other challenges, which is the industry landscape of transportation,
financial, logistic, and service industry. Therefore, our recommendation will
involve this two issues in a few solution.
In financial industry landscape, people are currently shifting from cash to
cashless. Therefore, financial technology player started to grow. Go-jek is one of
the pioneer with their GO-PAY, a mobile payment feature in GO-JEK application.
Currently, none of the mobile payment in Indonesia actually give the flexibility in
transaction for their customer. E-money mostly used for e-toll, Flazz used for bus
and train, T-cash used for cinema discount, while GO-PAY, can be used for
transportation, food delivery, shopping, utility and bill payment, and many others.
The potential is here already, therefore our first recommendation is for the
company to drive GO-PAY to become the one payment method to rule them all
with more realistically feasible use case, for example in day-to-day transaction that
has used cash all this time. We recommend to penetrate to GO-JEK’s merchant
first so they can accept GO-PAY in their offline payment by leveraging the
capability of their recently acquired FinTech startups. By moving to offline
services GO-JEK can reach and acquire more customer to uses their services as
they have their money locked in GO-PAY, forcing them to spend on GO-JEK’s
platform.
78 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2019

Our second recommendation relate with GO-JEK plan to do expansion. GO-JEK

already have the potential for expansion, and they are currently trying to do it. Yet,
they need a deeper understanding in other countries culture. Because, currently one
of GO-JEK success factors is because they are so fit with Indonesian local context.
Yet, we not yet know how it’ll be received in other countries. So, it’s very
recommended that GO-JEK have to think how they can make impact in other
countries as big as they’ve made here, in Indonesia. To understand other countries’
local context, GO-JEK can do a survey and also trying to live as the country’s
citizen to really feel what they actually need. By using data gathered from these
process, hopefully GO-JEK will have competitive advantage and win the
competition. To start their expansion, GO-JEK could leverage on their best practice
in Indonesia and adapt the system to match the other country. On facing a massive
competition such as Grab in South East Asia, GO-JEK could begin by providing
the basic services that they do best such as Motorcycle and Food to be able to
compete favorably then slowly expand into more venture along the line based on
the local needs whether it’s cleaning, massages, or even health.

(Received November 06, 2018; Revised June 07, 2019; Accepted June 20, 2019)
 The Leap of Go-Jek 79

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