Bumpy ride for Gojek

Bumpy ride for Gojek

Delivery business brisk in Jakarta but core passenger services shut down amid Covid curbs.

The Indonesian do-it-all app Gojek is set to feel the pinch of the coronavirus pandemic even more as the semi-lockdown of Jakarta has been extended until May 22. But while its core motorcycle taxi service is shut down, deliveries of food and other services are on the rise.

The first two-week phase of large-scale social restrictions in a bid to curb the spread of Covid-19 ended on April 23. The measures included, among others, a prohibition on application-based motorcycle taxis from transporting passengers in compliance with social distancing measures.

But as the virus has continued to spread in significant numbers, Jakarta Governor Anies Baswedan announced last Wednesday that the restrictions would last for 28 more days.

As of last Thursday, Indonesia had officially reported 7,418 Covid-19 cases -- almost half of them in the capital region that includes Jakarta -- and 635 deaths.

As soon as the large-scale social restrictions began in Jakarta -- the first region in Indonesia to impose curbs -- users found that the GoRide, the motorcycle taxi-hailing service in the Gojek app, was deactivated.

Gojek and its peers are, however, still allowed to operate food and goods delivery services.

Nila Marita, Gojek's chief of corporate affairs, acknowledged that this is indeed a challenging time for all business sectors. The focus for Gojek, she said, was on efforts to ensure that its driver/partners have some income stability amid the drop in public activities because of the Covid-19 outbreak.

Even before the restrictions were formally enforced, Gojek had begun to experience a significant drop in activity. The government issued its first appeal to people to work and study from home if possible and encouraged social distancing measures in the second week of March.

According to data from Jakarta-based Statqo Analytics, the number of active users of the Gojek ride-hailing app dropped by about 14%, from 3.16 million to 2.57 million, between March 19 and March 26.

"We have expanded our services to keep our partners' income afloat," Ms Marita told Asia Focus in an emailed response.

"GoFood has expanded to cater basic staple food purchases, including purchases from Mitra Tani (Farmers' Partner) Market owned by the Agriculture Ministry," she said.

As well, users can order everyday items from a number of minimart chains via GoShop and GoMart.

On April 20, the Trade Ministry and Gojek signed a memorandum of understanding to ensure distribution and transport of staple foods and other essential items.

Trade Minister Agus Suparmanto said the agreement would pave the way for solutions that bridge the needs of consumers and businesses, with Gojek providing its online-based transport as a tool for goods deliveries to customers.

The minister also drew attention to a business-to-business agreement between Gojek and the Indonesian Meat Importers Association, the Indonesian Retail Association and the Indonesian Market Traders Association, which are partnering with the ministry.

"We expect this could expedite the flow of goods transport and deliveries, while we maintain affordability and effectively adhere to large-scale social restrictions," Mr Suparmanto said.

"We support the Trade Ministry's programme to make use of mobile applications to meet people's needs for staple food during this pandemic," said Shinto Nugroho, head of public policy and government relations at Gojek.

Ms Marita said the company had also cut the budget allocation for employee pay rises this year and cut senior management salaries by 25% for the year. The resulting 100 billion rupiah (US$6.5 million) will be donated to drivers and other partners bearing the brunt of the pandemic impact.

One Gojek driver in Jakarta told the Nikkei Asian Review earlier this month that his daily pay had fallen to 30,000 rupiah (US$1.90). "It's a third of what I made before the coronavirus epidemic," he said.

A Gojek foundation will manage the funds which will be used for healthcare, support for income and daily expenses.

Drivers in cities where Gojek operates are provided with face masks, hand sanitiser and vitamins, and they also receive coupons for free food to help reduce their own daily expenses. The company is also cooperating with a leasing company to relax repayment terms on loan instalments for GoCar drivers.

The company said on April 7 that it would give 1 million coupons weekly, each worth 5,000 rupiah (32 cents), to drivers in Jakarta for use at participating restaurants.

Gojek co-CEO Andre Soelistyo told Reuters in late March that supporting drivers would put the company in a stronger position to capture the bounce in mobility demand once activity returns to normal in Indonesia.

Do you like the content of this article?