The Jakarta Post
Ride-hailing firm Grab Indonesia contributed Rp 77.4 trillion (US$5.45 billion) to the Indonesian economy last year, largely thanks to its food delivery service, while providing gig work for the country’s informal workers, research released Thursday has shown.
The research, conducted by the Centre for Strategic and International Studies (CSIS) and Tenggara Strategics, revealed that the biggest source of Grab’s contributions to the economy came from its food delivery service GrabFood, which contributed Rp 37.3 trillion of the total Rp 77.4 trillion. The overall 2019 figure marks a 58.3 percent increase from the firm’s Rp 48.9 trillion in 2018.
The data was calculated based on the incomes of more than 5,000 surveyed Grab partners and merchants before and after joining Grab, across its four services – motorcycle taxi service GrabBike, ride-hailing service GrabCar, GrabFood and merchant GrabKios.
“As Indonesia starts to move past COVID-19, we believe that platforms like Grab and the gig economy can support the country on its road to recovery,” said Riyadi Suparno, executive director of Tenggara Strategics, on Thursday.
With the economic downturn as a result of the COVID-19 pandemic, experts have warned that the country’s 70.49 million informal workers, the majority of the Indonesian workforce, are considered the most vulnerable. Motorcycle taxi drivers association Two-Wheeled Action Movement (Garda) reported a 70 percent decrease in drivers’ daily earnings during the pandemic.
However, the research notes that Grab has provided earning opportunities for those dealing with unemployment, like in 2019, when 31 percent of GrabBike and 26 percent of GrabCar partners had no income prior to joining Grab.
The company’s digital platform would also aid the merchant-partners’ transition to a post-pandemic economy, Riyadi stated.
“Being digital-ready will be more important than ever in the new normal. Grab can help businesses adapt by making the shift online through services like GrabFood and GrabKios,” Riyadi added.
Earlier this month, Grab Indonesia introduced a new app called GrabMerchant, aimed as a one-stop service platform that allows micro, small and medium enterprises (MSMEs), including those in food and beverage, to digitally manage their operational hours, orders, employees, as well as menus and promotions.
Meanwhile, the head of the CSIS department of economics, Yose Rizal Damuri, noted that Grab, as a digital platform, played a supporting role during the large-scale social restrictions (PSBB).
“We see how digital platforms and gig work help logistics activities during the PSBB, like with the services offered by Grab with goods delivery,” he said.
In a statement issued on May 5, Grab Indonesia reported a 22 percent and 21.5 percent increase in GrabMart and GrabExpress orders respectively from February to March, when people largely avoided going out. GrabMart is an online grocery shopping service and GrabExpress is a courier service.
Tenggara Strategics researcher Stella Kusumawardhani said that, based on the 2019 findings, GrabFood also helped small businesses expand at minimal cost.
“Unlike the conventional restaurant, where additional investment is required to increase capacity at their dine-in locations, we found that 48 percent of GrabFood merchants could increase their sales without the need to spend on additional costs,” Stella said.
In 2019, the research found that GrabFood merchant-partners saw their monthly sales increase by 35 percent to Rp 49.6 million per month from the average of Rp 36.7 million per month in 2018.
Grab Indonesia managing director Neneng Goenadi welcomed the study, stating that, with the current economic uncertainties, the company could help with the country’s economic recovery through the digitalization of MSMEs.
“It is part of our commitment to support the prosperity of gig workers and the MSMEs joining our ecosystem, as well as benefitting the Indonesian people,” he said.