Indonesian policy set to boost app-based services

Subject

Outlook for app-based services such as Uber in Indonesia.

Significance

Uber started its business in Indonesia in 2014, and is now operating in four major urban areas: Jakarta, Bandung, Surabaya and Bali. There are many other app-based transportation and other services operating in Indonesia, but Uber's presence in particular has led to major protests by taxi drivers in Jakarta and Bali.

Impacts

• Absent an MRT system in Indonesia's large cities, middle-class consumers will be drawn to app-based taxi services.
• Innovation in app-based transportation and other services will lead conventional businesses to adapt to ensure survival.
• Taxi services are no panacea for Indonesia's vast transport gap; the government will seek foreign investment to expand services.