TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Will conventional businesses die out?
Digital technology has reduced the cost of obtaining, transmitting and processing customer reviews to measure driver performance.
Change Size
Stand for the rights: Hundreds of drivers of conventional taxis stage a rally at Gladag traffic circle in Surakarta, Central Java on Tuesday to protest ride-hailing apps. (JP/Ganug Nugroho Adi)
D
igital technology has disrupted the conventional economy. In Indonesia, this digital disruption has occurred mostly in the transportation services and retail sectors.
The operation of internetbased ride-hailing services like Go-Jek, Grab and Uber has shaken the taxi business, which led to street protests by taxi drivers and the enactment of Ministerial Decree No. 108/2017 to appease them. In turn, the new ministerial regulation has drawn protests from ride-haling drivers.
In retail, the rise of online retail platforms, such as Lazada, Shopee and Tokopedia, have changed consumers’ shopping trend toward internet shopping, depressing the sales and profits of brick-and-mortar stores.
There is no sign that the digital disruption will end soon. Rather, it has spread to finance and healthcare services. The rise of financial technology (fintech) has led to the birth of a variety of financial products that challenge conventional banking.
One such example is peer-topeer (P2P) lending that allows individuals and small businesses to obtain loans from individual lenders without providing collateral and with lower interest rates than banks’ lending rates. Another example is e-payment services, combined with e-money provided by non-bank enterprises, such as Go-Jek’s Go-Pay service and Doku’s Wallet.
Meanwhile, the effect of digital disruption in healthcare services is much milder, as telemedicine has not yet been fully implemented. Nevertheless, the situation might change soon as healthcare consumers embrace telemedicine.
The experience has caused shock and bewilderment among professionals and the general public. They know that digital technology has brought tremendous benefits to the economy, but feel nervous when dealing with the transformations in the way we do business.
