Further on Down the Uber Road
New AmCham member John Colombo of Uber talks shared vehicles, public transit, regulations and innovation
By Tellisa Ramadhani
Tuesday, August 15, 2017
Ride-sharing apps such as Uber say that they are also part of the solution, providing the option of shared mobility, and noting that many passengers are simply being driven to public transit, rather than replacing it. Moreover, ride-sharing apps can complement public transit by providing first and last mile solutions for riders.
AmCham Indonesia spoke with John Colombo, Head of Public Policy and Government Affairs of Uber Indonesia about the company and his thoughts on the new regulations published by the government regarding ride-sharing apps.
AmCham Indonesia: What was behind Uber’s decision to expand into Indonesia?
John Colombo: Uber right now operates in 76 countries and over 500 cities, so if we are not in Indonesia, we are doing something wrong. It is definitely a place that we think has a lot of potential – the economy is growing at a healthy pace. We hope that we can be a contributor, not only in places where we already are but also other cities throughout Indonesia.
We are expanding rapidly in Indonesia. We began the year in only six cities, and we are now in over 30.
Each country in the [Southeast Asia] region has its own opportunities and challenges. The thing we really like about Indonesia is that the growth is increasingly spread throughout the country and across segments of the population, so we see opportunities to expand outside of Jakarta. We also think that the current administration is pro-innovation and is supportive of new modes of transport that benefit transportation providers and consumers alike.
In cities worldwide, we’ve seen that as the public transport system develops, Uber actually gains more users because many people use Uber to get to public transit. The result is that the need to own a vehicle goes down because you can use Uber to get to public transit. So it is not point A to B, but now it is A to D – with B and C being public transit. We are really excited about the government's plan to promote public transit and we are looking forward to not only the current plan under the Jakarta administration up until now, but even the incoming administration is confident that it will continue to promote public transit and will also be supportive of ride-sharing apps.
Both riders and the drivers are excited about the possibilities that applications bring. We see a lot of people who own vehicles who have some extra time in between working hours or even some people who are between jobs using Uber to earn extra income by using their vehicle to provide rides for other people. Throughout Indonesia, people are looking for opportunities to earn extra income. These part-time drivers actually help to create a situation where during peak hours there are enough vehicles on the road to meet demand.
We also have a carpooling service, called UberPOOL. Ride-sharing alone, to the extent that it reduces dependence on private vehicles, can reduce emissions. But we also think that, through UberPOOL, we can provide options to carpool so that there are more people in fewer cars.
How do you ensure your customers’ and drivers’ satisfaction?
When you open your Uber app, at the top left you will see your rating. We take not only the rating of the drivers seriously, but also the riders. The rating system is an efficient way to distill feedback between drivers and riders. When you get a ride, it should be safe and reliable. We have a response team for both riders’ and drivers’ complaints to ensure that everybody is getting the ride they need in a way that is timely, safe, and reliable.
We want to ensure that transportation is as easy as turning on your water faucet. You don't wonder whether the water will come, you just know it will. Today, there is no reason why we can't have that for transportation.
But this should be accomplished in a way that offers flexibility for drivers. That means a fair amount of part-time drivers who may use the app for a little while, stop, and after a time start again at their convenience. We work hard to be a resource for people to connect themselves with others and make more efficient use of their existing vehicle.
Can you give us your view on the new regulations regarding the ride-sharing app?
First of all, we are really grateful that the government is engaging on this issue. It's really important, not only for us, but for driver-partners and people who use the Uber app. It is important that they have a legal basis to do that. We are really appreciative that the government has paid so much attention to this and is engaging in a way that is thoughtful and I think really forward-thinking.
For example, the government has established a legal basis for both applications and driver-partners. We also really support the government's efforts to ensure that all vehicles in Indonesia, not only Uber, Grab and Go-Jek driver-partners' vehicles, but also taxis, angkot, Kopaja, and MetroMini have undergone KIR [vehicle testing]. It’s important to Uber that driver-partners and riders alike are traveling in vehicles that are safe.
Challenges include the imposition of quotas – limits on the amount of driver partners that can use applications to share rides. This is particularly difficult for part-time drivers, and it reduces the flexibility of people to use the app. It is also distortionary from an economic standpoint, and reduces the ability of applications to help to ensure that the amount of vehicles on the road matches demand.
We have found that the Indonesian government cares a great deal about supporting safe, reliable transport, and they have been proactive about engaging all stakeholders in formulating policy. It makes us very happy that they take this sector seriously and that in turn gives us the certainty that we can be here for the long term.
At the local government level, we’re seeing excitement about the benefits that ride-sharing can bring. Forward-thinking provincial governments are working to ensure that cooperatives can obtain transport licenses in a timely fashion in line with the recently issued Ministerial Regulation 26. Visitors to Indonesia from over 70 countries used Uber here last year, and local governments are increasingly recognizing the positive contribution ride-sharing makes to promoting tourism by providing visitors safe and reliable transportation options.
At the central government level, we’ve found that policy makers are working hard to ensure that the transport sector is regulated in a way that allows for new modes of transportation to flourish, but also ensure safety and fairness for drivers and riders.
Do you have any suggestions on how things should be done in terms of regulations? And why?
I think it is important to allow individuals to use their own vehicles and use an application to provide transportation services to others. They must meet minimum standards, and we can help with that. But if we want to reduce congestion, we have to be moving toward a world where there are more people in fewer cars. We promote the use of private cars to provide public transportation services.
We also have to promote the integration of ride-sharing with public transit. The more MRT or LRT investment, the better. At the end of the day, there is a symbiosis where we can be the provider of the first and last mile.
With respect to fares, I think the thing to remember is that in the morning and evening we will have peak demand, which can go down during other times of the day. If we are setting a quota or setting fares, we are essentially setting a constant supply, which means there are too few cars during peak hours and too many when demand is lower. By allowing fares to fluctuate, we can make sure people have the incentive to be out there driving when riders need rides. In this way, even if there is flood and traffic is awful, you know that somebody is going to pick you up because they are incentivized to do so. We facilitate them to make their own decisions about when they want to provide transport services.
What is the plan for Uber’s future in Indonesia?
We are excited about the Indonesian market, and we’ll continue to expand. We will also deepen our integration with public transit networks and promote public transit to our riders. Another focus is reducing the amount of space taken up by parking lots, which can be better utilized as green space, parks, or commercial space, so we can have a healthier, less-congested world. All the time that we spend sitting in traffic is damaging to Indonesia’s economy and its citizens. We aim to be part of the solution.
We’re also assertively pursuing ways to add value to existing transport providers. For instance, we have a partnership with Express Taxi. The goal of this partnership is to ensure that every existing vehicle is utilized in the most efficient way possible. So if before, every hour it picked up one person, we want it to be three to four persons. In this way the driver, whether it's a cab or another vehicle, can offer a lower price but get a higher revenue per hour.
One great thing about Uber is that we are given the flexibility internally to make products that can be customized to different cities worldwide. In Indonesia, our team developed a product called UberTRIP, which is available in Bali. The Indonesia team had this idea and was empowered by Uber to execute it.
UberTRIP allows you to have a driver for an extended period of time and make stops along the way. There is a flat fee for the first five hours and an additional Rp 1,000 fee for each minute after five hours up to ten hours. It is competitive with existing options of that kind and has several additional benefits that come with Uber rides, including that each ride is insured and that riders enjoy several safety features inherent to the app.
Lastly, as a new member of AmCham, what are your hopes in joining us?
We are kind of the new kid on the block, and other American companies are doing great work here. It is important that our voice be heard, and we are approaching things from a cross-sectoral standpoint. Some of the things that affect us affect others as well. We can learn from each other. AmCham is highly valuable as a forum to exchange ideas and to help network. I think it is extremely valuable for there to be a forum through which the Indonesian government and the private sector can engage US companies.