Case Study • Rajawali: Working with Taxi Drivers as Business Partners in
Indonesia. 2. Summary. Express Taxi is a subsidiary company of Rajawali
Corporation ...
Asia • Indonesia
Rajawali’s Express Taxi: Working with Taxi Drivers as Business Partners in Indonesia Prepared by • Elvie Grace A. Ganchero (Philippines) & Chrysanti Hasibuan-Sedyono (Indonesia) Sector • Transportation Enterprise Class • Large National Company
Summary Express Taxi is a subsidiary company of Rajawali Corporation, a holding firm with a number of diverse businesses in Indonesia including the Sheraton Hotels (in Bali, Bandung, Lampung and Senggigi), Excelcomindo GSM Cellular provider, Metro Department Store, Palm Plantation and its newest acquisition of Cemex Cement portfolio in Indonesia. The Express Taxi service is the second largest taxi operator in Indonesia, managing 2,257 taxi units at the end of 2006. Its biggest fleet serviced the country’s capital, Jakarta, and a smaller contingent operated in the cities of Surabaya, Semarang and Medan. The Asian financial crisis in 1997 created an employment vacuum as companies were forced to lay-off 1.4 million workers.1 Ten years later, the country had barely recovered. Unemployment rates continued to rise, and poverty defined Indonesian economic, social and security contexts. This case highlights Rajawali’s Express Taxi as an example of how a company helped fight poverty by forging a mutually beneficial business partnership between the core business activity (taxi service) and local actors (drivers) from impoverished urban and rural communities. By providing access to capital, Express Taxi redefined the traditional business model between large transport companies and drivers’ groups into a business-to-business partnership. The case examines the challenges and opportunities of such a partnership in the context of income generation for the poor and reliability and safety for the general public.
Positive Outcomes for the Poor
Provided employment to over 4,000 drivers in major Indonesian cities Allowed drivers from poor urban communities to own an asset (i.e. a car) by providing access to non-collateral loans
Key barriers to serving the poor
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Low rates of education and a workforce of limited skills Drivers’ lack of customer service skills, motivation for providing quality service Drivers had little to no credit history, no collateral to purchase their own vehicles Taxi drivers, in particular, are not considered as credit worthy, and it was impossible to access credit to start their own taxi service businesses
Kompas, Economic Crisis 1998, The Unforgettable Tragedy (21 December 1998)
Case Study • Rajawali: Working with Taxi Drivers as Business Partners in Indonesia
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Key Innovations
Invested in drivers’ training to improve driving skills and knowledge, as well attitudes toward providing quality service in alignment with the company’s values and reputation Partnered with government departments for specialized training Rajawali’s Express Taxi enabled poor urban taxi drivers to own a taxi by providing loan guarantees and access to credit Rajawali’s Express Taxi established customer relationships and built the brand image for the taxi drivers to identify themselves, which could not have been done by individual drivers
Opportunities & Challenges for Replication and Scaling Up
In a country of over 221 million, where transport service is a perennial problem, the possibility for scaling up is significant The Taxi Ownership Scheme is a highly replicable model, provided all the essential elements such as providing loan guarantees and training are integrated Other companies who wish to replicate the model will have to seriously study the mechanism, because the company learned that there are high risks involved
Case Study • Rajawali: Working with Taxi Drivers as Business Partners in Indonesia
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