Uber's Cheaper Service Called UberX to Start on Friday in Jakarta

JANUARY 29, 2015

Jakarta. Uber Technologies, the San Francisco-based taxi booking app developer, is set to launch its low-cost service in Jakarta on Friday in its continued quest to conquer taxi services in Southeast Asia’s most populous nation.

“All over the world what we’ve seen is that people are looking to save money on things and transport is a very important people’s budgets. We’re proud to say that UberX will be the least expensive way to travel around Jakarta other than walking or buses,” said Michael Brown, the general manager for Southeast Asia, during a media briefing in Jakarta on Thursday.

The company claims the service called UberX to be 35 percent cheaper than its premium counterpart, Uber Black, which was the first service the firm offered in Indonesia last year. At its current rate, UberX charges riders at a base fare of Rp 3,000 (24 cents) per ride and an additional Rp 2,000 for every kilometer or Rp 300 per minute of waiting time.

Brown noted that the current rate excludes the typical 20 percent commission Uber generally charges, as the firm hopes to attract new customers. However, he didn’t disclose how long the commission-free promotional rate will last.

In comparison, Uber Black, which offer riders premium cars and a private driver, starts at Rp 7,000 and charges an additional Rp 2,850 per kilometer or Rp 500 per minute. Aside from Jakarta, the firm expanded its Uber Black service in Indonesia to Bali earlier this month, mostly covering the Seminyak area.

When asked about the threats of Uber service being banned from the DKI Jakarta government last year, Brown said that the company has been in touch with the government, as well local transportation organizations, to explain its business model to the Jakarta authorities.

The dialogue “has been very productive. The most important thing is that we’ve been able to explain our model — that we’re a tech company. We don’t own or operate any vehicles,” Brown said. “As the government understands that better, we’re making good headway.”

Still, it remains unclear whether the Google-backed company has obtained a particular operational license in Jakarta.

Uber — currently available in 277 cities across 53 countries — has faced resistance from many cab companies around the world. Its operations have even been banned in certain countries, such as in France and Spain.

Uber competes head to head in Indonesia with other technology companies including GrabTaxi, a taxi booking smartphone app from Malaysia, and Easy Taxi from Brazil. Local taxi operators, such as Blue Bird and Express Transindo Utama, the operator of Express taxi, have been improving their own booking app to compete.