JAKARTA -- U.S. ride-hailing service Via Transportation began operating in Indonesia on Wednesday, offering minibus ride shares in Bekasi, an eastern suburb of Jakarta, the latest example of a company from outside the region looking for opportunities in Southeast Asia's growing ride-hailing market.
Traffic congestion plagues many Southeast Asian cities, with Jakarta among the worst offenders. Traffic jams are estimated to cost the Indonesian economy $4.5 billion a year.
The country's spotty public transportation has helped ride-hailing take root. Indonesians are the world's second-heaviest users of ride-hailing apps after Singaporeans, according to the Global Digital Report 2019. Go-Jek and Singapore-based Grab are already locking horns in the Indonesian market, but Via believes it can carve out a place for itself.
Via is focused on minibuses, rather than motorcycle rides, where competition is fiercest. With a local partner, the New York-based company started a service called Tron with a fleet of 150 vehicles.
Minivans used in public transport in Indonesia, called angkot, can carry around 10 people. With Tron, customers use an app to tell drivers where they are and where they want to go. The service sends a van, picking up people who are going in the same direction, allowing them to share a ride. Conventional minivan services, run along fixed routes, but Via's system cuts down on empty vans, easing congestion and pollution.
"We're excited by the number of opportunities we've seen to help solve mobility issues throughout Asia, and look forward to increasing the quality of life for many of its residents," said Chris Snyder, Via's senior vice president for expansion. The company plans to start similar services elsewhere in Asia.
Jakarta's jammed streets hurt the city's air quality, making the introduction of cleaner forms of transportation essential. "The ASEAN transport market is rapidly changing to meet the needs of its residents, and we see on-demand shared rides as the best solution to help increase mobility, while reducing traffic congestion and carbon emissions. Via's shuttle operating system is re-engineering public transit, from a regulated system of rigid routes and schedules to a fully dynamic, on-demand network," Snyder said.
Launched in New York in 2013, and later expanding to London and Berlin, Via counts German carmaker Daimler among its investors. It specializes in developing ride-hailing systems for urban areas. The company has provided more than 50 million ride shares and attracted about 2 million registered users globally. In Japan, Via is working with real estate developer Mori Building on a pilot project to develop a highly efficient mobility service in Tokyo.