Global Business Guide Indonesia

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Express Group | Mr Daniel Podiman
Mr Daniel Podiman

In addition to our ability to work effectively with Express Group drivers, we distinguish ourselves from competitors through lower tariffs attuned to the price-sensitive Indonesian market.

Mr Daniel Podiman, Chief Executive Officer

Established in 1989 as a subsidiary of the Rajawali Corporation, Express Group is one of the largest taxi operators in Indonesia. What can you tell us about your company’s background and its strategies going forward?

Express Group has over the last few years focused on expanding its fleet and now has more than 10,000 licensed taxis. While our main competitor has approximately 25,000 taxis, we have a greater presence actively operating on roads as a result of our partnership business model that consistently attracts new drivers. As opposed to paying our drivers based on commission, we view drivers as partners instead of as employees and allow them to pay refundable deposits to use our cars upon passing all required tests. They then enter into a contract agreement subject to review every six years whereby they pay us a fixed rate to essentially rent our taxis. This creates a win-win partnership in which costs related to fuel and maintenance are borne by the driver, who is afforded with greater flexibility in earning whatever they can bring in on top of the fixed rate. Through this type of business model we have been able to build mutual trust between management and our 25,000 drivers and grow significantly in pursuit of our vision of becoming the number one taxi operator in the Greater Jakarta area by 2017.

In addition to our ability to work effectively with Express Group drivers, we distinguish ourselves from competitors through lower tariffs attuned to the price-sensitive Indonesian market. To cater to customers seeking more upscale services, we also offer premium taxi services through the brand Tiara Express and are the first taxi company in Indonesia to use the luxury MPV Toyota Alphard for this fleet.

Going forward, we plan to expand our bus operations in keeping with Indonesia’s growing reputation as a tourism destination. This year [2014] we were able to add 150 buses, as part of our strategy to pursue diversification within the transportation industry. Other steps we have taken to ensure our continued growth include the launch of an app made available for Android devices that enables customers to order Express taxis. All of our taxis are now equipped with a digital dispatch system to facilitate greater efficiency.

Given the context of your business model, how does Express Group manage to maintain a sense of autonomy for its drivers while conveying one image and a uniform strategy in terms of branding?

First and foremost, we mandate that all of our drivers return to our depot on a daily basis, where we inspect taxis to make sure that they meet the high standards associated with the Express Group brand. To effectively convey our brand message we are also active when it comes to working with the media to publish our latest news as well as hosting events that provide a clear overview of our agenda for our yearly plans and priorities. Taken together, this builds towards our current standing as a reputable company in the industry.

According to Euromonitor, Indonesia’s market for taxi services will grow by nearly 20% (CAGR) between 2012 and 2016. Having said that, what do you expect to be the main hurdles for the transportation sector?

Changes in fuel subsidy policy is clearly something we need to be mindful of, though as taxis are already one of the cheapest form of transportation in the country we expect that we should be able to adjust appropriately. Moreover, if fuel prices increase, this will be felt across all modes of transportation, which means that using taxis will still be relatively inexpensive compared to owning a private car.

In anticipation of this we have introduced a corporate card targeting businesses that will eventually move away from using private cars in favour of taxis. This card, as one of the first of its kind in Indonesia’s transportation industry, enables companies to deposit a pre-determined amount of money that can then be used by employees via the card to pay for Express Group taxi fares. This innovation and a commitment to improving our quality of service positions us to take advantage of a growing middle class in Indonesia that now expects more from their taxi service providers. This positive outlook is reflected in the promising performance of our shares, which have tripled in price since we first went public in 2012.

As the foremost challenger to Blue Bird, Indonesia’s taxi service provider with the greatest top of mind awareness, what steps have you taken to assert your competitiveness?

Blue Bird’s top of mind awareness, particularly among foreigners in Indonesia, can be explained by their presence in hotels. Though much of our success comes from the partnership business model, one of its disadvantages is that drivers have less of an incentive to wait in a given location. Drivers paid by commission, such as those employed by Blue Bird, can be made to stay in places such as hotels even if there is no order. Because of this over the next one to two years we will launch a new taxi brand, Eagle, using a commission payment structure. These taxis will primarily be positioned at hotels, and should see our group become even more competitive.

Having already entered cities such as Semarang, Medan, Padang and Surabaya, in which areas of Indonesia do you see the most potential for future expansion?

The most promising areas in Indonesia are its second and third cities, and we will take a measured approach when establishing operations in them. Unlike Jakarta, these locations do not require the immediate introduction of more than 1,000 taxis; we have instead typically entered with a fleet of 100 vehicles. We expect that our ongoing expansion will see us move into Cirebon, where the next airport near to Jakarta will be built. In many of these cities, our company offers MPV taxis in addition to sedans, as people here tend to travel in large groups.

How is Express Group positioned towards cooperation with international investors and foreign partners?

When we were a private company, this type of cooperation was difficult to carry out as a result of restrictions put forward in the Negative Investment List. As a public company, foreign entities can now acquire our shares but only up to 49% as mandated by local regulations.

We do see potential in working with foreign companies for brand alliances, and have carried out this kind of collaboration in the past with a Malaysia-based taxi company. In this regard we are looking for opportunities to work with Singaporean companies as well, as part of a prospective regional expansion through acquisition.

As a final message, what would you like our readers at GBG Indonesia to remember about the country and your company?

Indonesia has big potential as a market for transportation services and taxis in particular. Our company is thus committed to an expansion of our fleet, including our regular service taxis, buses as well as our premium services.

Global Business Guide Indonesia - 2014

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