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Grab “lights up” Kupang and Jayapura, UI study reveals
Newly published research by the Social and Economic Research Institution at the University of Indonesia Economy and Business School (LPEM FEB UI) has revealed that the presence of Grab has boosted economic activity.
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(Courtesy of Grab)
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ewly published research by the Social and Economic Research Institution at the University of Indonesia Economy and Business School (LPEM FEB UI) has revealed that the presence of Grab has boosted economic activity in Kupang, East Nusa Tenggara, and Jayapura, Papua, highlighting the benefits of digital technology for the regions.
The research studied the luminosity of night lighting in Kupang and Jayapura, discovering that the level of luminosity of smaller areas in Kupang and Jayapura when compared with other parts of Indonesia has doubled. The presence of convenient mobility and delivery services has eased the transportation of people and goods, triggering an increase in economic activity even during the evenings.
Coordinating Economic Affairs Minister Airlangga Hatta stated that digital technology was a driving force for economic activity. “Grab's presence is significant in sharpening technological adoption in Kupang and Jayapura. Expanding digitalization, especially during the pandemic, will trigger economic value, which will certainly have a positive, long-term impact on the digital economy of the country,” he added.
The surge in economic activity has created new income opportunities in Kupang and Jayapura, notably for Grab driver and merchant partners. LPEM FEB UI research found that 30 percent of GrabFood and 50 percent of GrabKios merchant partners in Kupang and Jayapura between 2019 and 2021 were new businesses, meaning that Grab has helped create hundreds of new micro, small and medium enterprise (MSME) entrepreneurs.
Grab's presence in Jayapura started with the launch of GrabKios in 2017, followed by GrabBike and GrabCar. Currently, its services in Jayapura include GrabExpress and GrabFood. Meanwhile, Grab set foot in Kupang in 2018 and has since then, introduced GrabFood, GrabKios, and GrabMart, besides its transportation services.
The research also revealed that driver partners joined Grab due to supportive factors such as work flexibility. This utilization of technology, heightened by the digital skill training provided by Grab, has encouraged digital inclusion. Research data show that internet and smartphone usage among merchant partners in Kupang and Jayapura has reached 100 percent, twice as high as the population average in the aforementioned areas. Furthermore, seven out of 10 driver partners utilize these technologies with a greater intensity compared with non-Grab drivers.
Greater financial inclusion goes hand-in-hand with digital inclusion, considering that the Grab app is fully integrated with financial services. The research revealed that e-wallet use among merchant partners is 87 percentage points more than non-Grab merchants. Moreover, 50 percent of merchant partners stated that Grab was the reason they had digital financial accounts.
Furthermore, the research pointed out the rise in the use of more sophisticated financial products and services. Grab driver-partners are twice as likely to purchase insurance and investment products, with around 60 percent of driver-partners taking advantage of health insurance products facilitated by Grab to cover themselves and their families.
“The results of the LPEM FEB UI research reflects Grab's strong commitment to Indonesia. The findings that Grab has contributed to driving the economy in Jayapura and Kupang encourages us to continuously pioneer digital solutions that will accelerate the digital economy, positioning us as a trusted platform for Indonesia,” Neneng Goenadi, country managing director of Grab Indonesia, said.
The research also mentioned that the variety of safety features and policies, including safety center and phone number masking, has encouraged a safer and more comfortable traveling experience for both female driver partners and customers.
Head of the LPEM FEB UI Digital Economic Research Group Chaikal Nuryakin said that moving forward, this research could aid in designing comprehensive policies that would boost the benefits of technology for Kupang and Jayapura. “We see that there is still room for digital skills training for driver partners and merchants. With a deeper understanding of technology, they can optimize existing technology solutions to further improve their welfare,” he concluded.
