Driver-partners of GrabBike saw their income up by 113 to 114 percent to an average of Rp 4 million to Rp 7 million per month after joining Grab. (Antara Photo/Indrianto Eko Suwarso)

Grab Contributes $3.5b to Indonesian Economy in 2018

BY :CHRISTIAN LEE

APRIL 12, 2019

Jakarta. Ride-hailing company Grab contributed Rp 48.9 trillion ($3.46 billion) to the Indonesian economy last year, boosting income of their driver-partners and small medium enterprises on the platform, according to a study written by the Centre for Strategic and Intelligence Studies (CSIS) and Tenggara Strategics.

The informal sector in Indonesia, made up mostly of self-employed workers, small business owners and freelancers, employs about two-thirds of Indonesia's 131 million-strong workforce. The sector seems to have found a new ally in the digital platforms that propel these workers' productivity, the study showed. 

Driver-partners of GrabBike, the platform's bike riding service, and GrabCar, its car-sharing service, saw their income up by 113 to 114 percent to an average of Rp 4 million to Rp 7 million per month after joining Grab, according to the study. 

"Income in Indonesia’s informal sector is very low, even lower than the minimum wage. One reason is the low demand for goods and services from the informal sector. Using technology, as Grab has done, can help generate demand for these goods and services, so that income can increase," the head of CSIS' economic department Yose Rizal Damuri said.

GrabFood, the company's food delivery service, contributed the most to the Indonesian economy by making Rp 20.8 trillion. GrabBike and GrabCar followed with Rp 15.7 trillion and Rp 9.7 trillion respectively, while Kudo, the platform's microfinancing service, contributed Rp 2.7 trillion, the study showed. 

It highlighted that 300,000 driver-partners and 40,000 Kudo agents had joined Grab last year. Had they remained unemployed, the economy would have missed out on the Rp 15.4 trillion that they generated through the Grab platform. 

To measure how Grab's technological innovation has enhanced the informal economy in Indonesia, CSIS and Tenggara Strategics conducted surveys in five Indonesian cities—Jakarta, Bandung, Surabaya, Medan and Makassar—on four Grab services: GrabBike, GrabCar, GrabFood and Kudo. The cities were selected according to the number of their Grab users.

The survey involved 3,418 respondents which were interviewed from November to December last year about, among others, the income they make on the Grab platform. The data showed GrabFood generated most of their income, followed by GrabBike and GrabCar. Kudo has more impact on second- and third-tier cities.

The results of the study showed that 50 percent GrabBike's driver-partners earn between Rp 3 million and Rp 5 million a month. Before joining Grab, only 22 percent of them earned income in this range. 18 percent of these driver-partners earn up to Rp 5 million-Rp 7 million after joining GrabBike.

The findings showed that the majority of GrabBike's driver-partners earn 135 percent more than the average informal sector worker and 208 percent more than the average freelance worker according to the latest Central Statistics Agency (BPS) data. 

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