Industry Review Of Taxi Service In Indonesia

Ways by which SME increase their business in Indonesia

Discuss about the Industry review of taxi service in Indonesia.

Ways by which SME increase their business in Indonesia

In Indonesia, small and medium sized enterprises have been historically the main player in domestic and economic activities. It especially provides a large number of different employment opportunities and hence serves as a generator of primary and secondary resources of income for many underprivileged or medium range income households in the mentioned Asian country. The importance of the small and medium sized enterprises in the economy of Indonesia is vast and it stands out to be one of the main sources of GDP contributor for the economies (Dachyar & Rusydina, 2015). There are a large number of economic or social constraints that act as an barrier to the growth of the business. However the business enterprises have implemented and used different ways and procedures that help the business to make the most of their expansion activities. This includes;

1. Simplified licensing of Star cab Taxi through the use of local one stop licensing and registration. This also includes a dramatic increase in the formalization of small business in some of the areas.
2. The government of Indonesia has helped ion the creation of more than 60 different independent, regional business associations across the length and breadth of the country which represents close to 2000 different businesses across the country. The management of Star Cab taxi has enrolled them in one such association to ensure the smooth running of the business (Harding, Kandlikar & Gulati, 2016).
3. Creation of internet portal had been one of the greatest achievements of the business and it has been helpful for the organizations to research about new and potential markets. Star Cab Taxi has to ensure that they utilize the internet portals and search for new markets.

Taxi Services Industry in the Developing Countries

Taxi in the modern days has become one of the most important means of transport and is an inevitable part of the modern business. The taxi service industry has become one of the most profitable and also one of the largest industries in some of the developing countries especially in Asia. The reason behind such a rapid development in Asia is the increase in the population of the country and also due to the increase in the number of commercial offices which has led to the demand for rapid transport to the offices.  According to, Dachyar & Rusydina (2015) the latest trend in the taxi industry is the app cabs which are taxis booked through some specific mobile based applications. The taxi app plays a vital role in managing the cab dispatch needs which help the taxi drivers to route properly for the mentioned ride as well as achieve inflated customer experiences. Time, cost and efficiency are well maintained through the help of the following applications and thus the app cab taxis are mostly preferred by the modern generation. Apart from the availability of the Taxi booking applications completely free of cost in the personal cell phones, the companies operating these taxis also provide different membership cards and additional discounts for the regular customers or the first time customers respectively.

Literature Survey on Taxi Indonesia

As mentioned earlier taxi industry has transformed itself into an integral part of the modern business and thus makes itself one of the best sources of public transport. The public transport system of Asia has been one of the better examples of transformation in the last few years. The countries especially in the ASEAN zone has been one of the bright sides in the transformation where apart from the traditional taxi transport system the new systems of App cab taxi have started operations. The case of Indonesia is perhaps the best example of the following where app cab operators like that of Uber, Grab and other similar kinds of local as well as international taxi operators is present in the market. 

Taxi Services Industry in the Developing Countries

Figure 1: Convenient Taxi vs. Online Transportation Services Fees

Source:  (Dachyar & Rusydina, 2015)

Relevance of Results

Lampung in Indonesia is one of the famous tourist destinations of the country and is expected for a sharp rise in the coming few years to make the most of the business. The emergence of Star cab in the Indonesian market has been a revolution to the taxi industry of India and that they have added another feather to the already existing app cab market of Australia. The internal analysis of the company can help to determine the condition of the business in Indonesia;

SWOT Analysis

STRENGTHS	WEAKNESSES
·         Efficiency to provide better service ·         Skilled Drivers ·         Superior reputation	·         Inadequate funds ·         Lack of expansion
OPPORTUNITIES	THREATS
·         Main taxi company in areas like Lumping ·         Weak rivals in the market	·         Strong competition from other forms of public transport ·         Strong business growth of other taxi companies

Strengths- The main strength of the mentioned app cab company is the efficiency to provide a better service for the market. The management of the company has also employed one of the best strategies by employing a number of skilled and qualified drivers for driving the taxis. It is important for the business organizations to employ such skilled drivers to earn reputation and name in the market.

Weaknesses- The main weakness of the following company is the lack of consistent funds in the business. Being a family business the management is not able to gather healthy sponsors to arrange funds that can help them to expand their business. This can act as a major problem in implementing their plans to expand their business and be one of the best in Indonesia (Djajadikerta, Susan & Djajadikerta, 2017). The lack of expansion thus forms another major problem for the business.

Opportunities- The lack of proper competitors in Lumping can be a great advantage for the business. The opportunities of the business must be utilized to gain a competitive edge in the market. Apart from this the presence of weak rivals helps in the further growth of the business.

Threats- The strong competition from other sources of public transport and the strong growth of the business of other Taxi companies like Uber are a threat to the success of the business in the Indonesian market (Haba & Dastane, 2018).

The main idea that is conveyed through the results of the following data points to the changing picture of public transport in Indonesia. The increase in the population, tourism opportunities and other forms of business growth has led to the increase in the different types of latest public transportation system (Haba & Dastane, 2018). The rise of the app cabs in the country has already brought in a revolution in the business and that the organization is in huge need of making the best of the business. The results regarding the Lampung district have signified the great importance and the large scale opportunities that lay ahead of the mentioned business organization in the country. The increase in the tourism factors and the absence of any large scale service of other taxi companies can be a major advantage for the business in the following area. The results have also highlighted the constraints faced by the business while establishing the particular business in the district of Lampung. This includes the likes of Geological problems, presence of low income households, absence of metallic roads and many other ssuch similar problems. These results must be taken seriously by the management and a thorough market research must be done before starting the operations of the organization in the particular area. The results must be considered to make the most out of the business.

Literature Survey on Taxi Indonesia

Summary of the Conclusions

The business analysis of the case of Star Cabs in Lampung, Indonesia has shown the popularity of the organization as well as for app cabs in the mentioned Asian country. However the growth of the business is not so easy as a number of different problems tend to disturb the stability of the business (Buckley, 2016). The company will have to study the market of Lampung in a proper way and make sure that the market and the people are able to afford an app based taxi which has a fare of more than 25% than their ordinary counterparts. Moreover the poor standard of the population living in Lampung will also prove to be major constraint in its expansion plans.

Implications for the Problems

Transportation is the lifeline of modern Indonesia as well as one of the main problems that are faced by the population of Indonesia.  According to, Buchholz (2015) the ever increasing population of Indonesia has also seen a rise in the number of transportation sources. The slow development of the public transportation system and the dependency on the existing infrastructure has been one of the main problems that has been crippling the industry since a large time from now and has led to the establishment of a large number of app cab taxi services that are slowly changing the transportation picture of Indonesia. The absence or the low rate of services of the different app cab taxis in the Lampung district of Indonesia implies the low rate of services in this part of the country and thus provides a much better scope for the mentioned business to make the organization one of the best in demands (Dachyar & Rusydina, 2015). The problems shown in the analysis of the following report shows the infrastructural crisis of transportation in the mentioned South East Asian country and thus paves the way for Star Cab to establish a competitive advantage in the Lampung market.

The analysis of the whole report has identified a number of different types of problems and issues that are faced by the organization. A number of different recommendations can be provided in the following report. This can be provided in a point form;

1. As the company focuses on a well maintained and well planned internal growth, the company must make sure to be the internal growth of the organization. The internal analysis of the market must be performed in a proper manner by the organization can implement the best strategy in the market.
2. As there is a lack of continuous funding the company is seen to be failing to expand the business in new markets even locally. In such a case the organization can enter into an alliance with other companies to enter into the markets.
3. The organization must take ample advantage of the business opportunity and make sure that the business takes the advantage of the different situation in Lampung. The absence of cab services in the mentioned area must be utilized in full extent.
4. There is a huge demand for Taxi in Lampung because of the growth in the tourism sector of the business. Therefore the management of the company must utilize the following opportunity to take advantage of the following chance.

References

Buchholz, N. (2015). Spatial equilibrium, search frictions and efficient regulation in the taxi industry. Technical report, University of Texas at Austin.

Buckley, C. (2016). An examination of taxi apps and public policy regulation.

Dachyar, M., & Rusydina, A. (2015). Measuring Customer Satisfaction and Its relationship Towards Taxi's Service Quality Around Capital City Jakarta. Int. J. Eng. Technol. IJET-IJENS, 16(1), 24-27.

Djajadikerta, H., Susan, M., & Djajadikerta, R. (2017). Antecedents of Customer Intention in Using Online Shared Motorcycle Taxi Service in Indonesia. Advanced Science Letters, 23(9), 8617-8622.

Haba, H. F., & Dastane, O. (2018). An Empirical Investigation on Taxi Hailing Mobile App Adoption: A Structural Equation Modelling. Business Management and Strategy, 9(1), 48-72.

Harding, S., Kandlikar, M., & Gulati, S. (2016). Taxi apps, regulation, and the market for taxi journeys. Transportation Research Part A: Policy and Practice, 88, 15-25.

Rodgers, T. A. K. (2016). A global review of taxi service markets and upcoming challenges. HKU Theses Online (HKUTO).

Smith, N. C., & McCormick, E. (2018). Uber and the Ethics of Sharing: Exploring the Societal Promises and Responsibilities of the Sharing Economy. In Managing Sustainable Business(pp. 579-611). Springer, Dordrecht.

Wahyuningtyas, S. Y. (2016). The Online Transportation Network in Indonesia: A Pendulum between the Sharing Economy and Ex Ante Regulation. Competition and Regulation in Network Industries, 17(3-4), 260-280.

Wijaya, V. (2017). An Investigation on the Important Factors Related to the Impact of Ridesharing Services on the Tourism in Indonesia: The Case of Bali Island. Management (STHEM), Universiti Utara Malaysia Postal Address: STHEM, UUM COLGIS 06010, Sintok Kedah Statement of review, 52.