Tom Pepinsky

Category: Indonesia

  • On the Disruption of GO-JEK

    Back in 2004, when JMP and I were living in Jakarta, we often used Pesan Delivery [= order delivery] to get our favorite food delivered to our apartment. It was great, just call and tell them what you want and from where, then delivered to your door in 45 minutes—which is unbelievable given Jakarta traffic. You could even mix and match, Izzi Pizza for JMP and Ganesha ek Sanskriti for me. Pesan Delivery relied on the ubiquity of the motorbike in urban Indonesia. Motorcycle taxis called ojek are a common mode of transport for middle class Indonesians, and many delivery firms use motorbikes to deliver office documents, food, groceries, and other small items.

    That was many years ago. Now, the new player in Jakarta is a company called GO-JEK. Think Uber + Instacart on motorbikes, plus they’ll perform Pesan Delivery’s service of picking up some food too. They guarantee delivery within 90 minutes anywhere in Jabodetabek, which seems absolutely impossible to me. They have completely embraced the Bay Area marketing lingo, translated into Indonesian. From the FAQ:

    GO-JEK adalah perusahaan berjiwa sosial yang memimpin revolusi industri transportasi Ojek.

    ==

    GO-JEK is a social enterprise that’s leading a revolution in the ojek transportation industry.

    Interestingly, the English language version of the FAQ makes a totally different claim to an English-speaking clientele.

    GO-JEK is a social enterprise that partners with a group of experienced and trustworthy ojek drivers to deliver a one-stop-shop convenience service for Indonesians.

    Fitra Faisal discusses how GO-JEK reflects a long-overdue wave of disruptive innovation in Indonesia, and predicts that GO-JEK will be the ultimate winner. It’s clear that GO-JEK fills a market niche. But it’s interesting to think just how and what GO-JEK disrupts. Contrary to the classic examples of disruptive technologies like the automobile or Facebook, GO-JEK isn’t disrupting an inefficient monopoly of established firms that’s failing to innovate. Rather, GO-JEK brings a modern corporate structure to a disorganized and unregulated market of individual transactions between ojek drivers and their clients. Such individual transactions are episodic, impersonal, uncertain, and therefore massively inefficient, subject to all sorts of transactions costs. GO-JEK makes each transaction regular, personal, and therefore much more efficient.

    Here’s what I mean. There is nothing about GO-JEK that is actually innovative as a service. GO-JEK drivers don’t drive faster, or know the lay of the land in Jakarta any better, than other ojek drivers. If GO-JEK can get you somewhere in 90 minutes, than the guy on the corner can too. It’s also been true that you can hail an ojek driver and ask him to do you an errand on his bike for a fee, something that I’ve done once or twice. Other services like Pesan Delivery could get you your food.

    But I never ever use ojek and only on the rarest occasion will hire a driver to do an errand. Why? Because how can you trust a driver to get you somewhere safely? What’s the right price? How can he trust you that you’ll pay him (in my experience, drivers are universally men)?

    Now, this doesn’t mean that the ojek market fails to function. It works, it’s just inefficient. In the best of cases, a kind of norm can emerge. If you take an ojek from the same place to the same place over months, you can learn what the right cost is, and perhaps a local thug has carved out control over a street corner to regulate which drivers get to drive from there so you can get repeat transactions with the same drivers. But this is rare, and there is still massive uncertainty. To whom do you complain if your ojek driver gets you muddy? What if it’s raining and all the ojek are engaged already—a real concern in Jakarta?

    GO-JEK works because it standardizes and regulates the chaotic market for motorbike services, which is literally hundreds of thousands of transactions every day in Jakarta alone. Yes, it has community rating of drivers. The firm’s value, though, is that it provides you with a driver, in a uniform, who gives you a transparent price and transparent service, and who is accountable to someone other than you.

    That’s worth quite a bit. But it’s not a disruptive innovation, it’s just a corporation selling a consistent product. And it is popular for all the reasons that chains are popular everywhere. (See e.g. my old review of Bakmi GM.)

  • Religious Regulation in Indonesia and Malaysia

    Several weeks ago the Monkey Cage published an essay by Daniel Philpott on religious freedom in Muslim majority countries. The essay makes two important points: (1) that many Muslim majority countries are open to multiple faiths, and (2) that religious unfreedom in Muslim countries need not be Islamist in origin, it can be secular in origin. Along the way, however, Philpott’s essay makes the following point about “patterns of repression” of religious freedom in the Muslim world.

    The Islamist pattern represents those Muslim-majority states that deny religious freedom by using the state’s laws, policies and coercive power to promote and enforce a highly restrictive and traditional form of sharia, or Islamic law, in all areas of life – economy, culture, religious practice, education, family life, dress and many others. Such states include Saudi Arabia and the other Gulf Cooperation Council members, Iran, Pakistan, Iraq and the Sudan, but also (beyond the Middle East) Malaysia, Indonesia and Nigeria. Iran and Saudi Arabia arguably deserve the status of standard-bearers due to how widely they are emulated and how actively they seek to spread their version of Islam.

    Including Indonesia and Malaysia alongside Iran and Saudi Arabia is striking. I’ve shared this with scholars of Islam and politics, both those with backgrounds in Southeast Asia and those without such backgrounds, and the reaction—uniformly—is that this is incorrect. I share this evaluation. Under no definition of the term “Islamist” does it make sense to code Malaysia and Indonesia as Islamist, or to conclude that these are states use “laws, policies and coercive power to promote and enforce a highly restrictive and traditional form of sharia…in all areas of life.”

    I asked Philpott via email about his decision to code Indonesia and Malaysia this way, and he generously shared his thoughts. He relies on a 2009 report from the Pew Forum on Religion & Public Life to code Indonesia and Malaysia as having high official restrictions on religion. While that report unfortunately gives us no real explanation of these coding choices, I don’t disagree with that whatsoever. My disagreement lies in how we understand the source of that unfreedom.

    Here is the key conceptual point. Philpott’s coding scheme considers the oppose of secular to be Islamist. Since neither Indonesia nor Malaysia is a secular state—the constitution of each invokes religion explicitly—the only alternative must be Islamist. I consider there to be many alternatives to secular repression of religion. One variety is Islamist. Another is nationalist. Still another is what we might call “official religionist.” However we term it, Islamist won’t do for Indonesia and Malaysia.

    Indonesia is an easy case to make. There was a point when Indonesians debated explicitly invoking sharia law in the Indonesian constitution under the so-called Jakarta charter. But that proposal failed (see Elson 2009 for a recent discussion of the Jakarta Charter and its implications). Since then, the Indonesian constitution has recognized an all-powerful “God”—deliberately translated as Tuhan rather than Allah—under the state ideology of Pancasila. This formulation explicitly and repeatedly rejects the supremacy of Islam over other religions (see this official 1978 explication).

    How, then, is religion regulated in Indonesia? Through restrictions on what counts as faith. Under the New Order, there were five recognized faiths: Islam, Hinduism, Buddhism, Protestantism, and Catholicism. Since democratization Confucianism has joined this. There is no space for, say, Judaism. There is also heavy regulation of “non-standard” forms of Islam. This means that so-called deviationist Islamic groups such as the Ahmadiyah run afoul of the official conceptualization of Islam (and interestingly, if Ahmadis where not to insist that they are Muslims, they might not face many restrictions at all). But there is also comparable regulation of non-Muslim faiths. Indeed, you can go to the Ministry of Religion in Indonesia and learn about the Directorate-General of Catholic affairs, Buddhist affairs, and so forth. Under Indonesian law, these bodies are responsible for all manner of norms, standards, and procedures for the organization and functioning of other officially recognized faiths. Critically, these are not Muslims regulating Christians, for Islamist ends; these are Christians regulating Christians, for nationalist ends.

    The case of Malaysia is more complicated, yet more interesting. Malaysia is an Islamic state, as I argued here. But it is not an Islamist state. The key distinction is the complete irrelevance of Islamic law for non-Muslims, and the parallel operation of civil and sharia courts for Muslims. Make no mistake: Islam does have constitutional status in Malaysia. But Islam is neither the sole source of legal authority in Malaysia, nor the final arbiter of debates about the propriety of various forms of social or religious regulation. It is the constitution (specifically, Article 3) that establishes Islam at the state religion of Malaysia; the very next article establishes that the Federal Constitution is the “supreme law” of Malaysia. This is entirely different from a Saudi-type model in which Islam is the ultimate source of legal and constitutional authority.

    Once one understand these points, then we can understand why Philpott’s coding of Indonesia and Malaysia causes such surprise. And what’s more, the fact that the Indonesian and Malaysian states neither promote nor enforce any type of conservative interpretation of sharia in all aspects of daily life—even among Muslims in the Islamic state of Malaysia—is no longer puzzling or surprising, it is natural.

    To be very clear, there are many strict Islamists in both countries who wish to enforce a conservative interpretation of Islam in all aspects of daily life. And it is true that Islam is regulated officially in both countries, by Muslims with a normative conception of what Islam means. Yet it is also true that even in Malaysia, there is nothing approaching the level of all-encompassing regulation that one finds in Saudi Arabia or Iran. This is a difference of kind, not one of degree. The single most important observation to make here is that even in the Islamic state of Malaysia, it is an opposition party that is pushing to implement hudud, and even then only in one state in the northeast. And so far this has failed, because it contradicts the Federal Constitution!

    It is important to understand the various sources of religious unfreedom in Muslim-majority states, and Philpott’s essay is a critical first step in that direction. Yet we must not ignore how the regulation of religious practice and belief varies. The Indonesian and Malaysian cases are key counterexamples to the assumption that religious regulation is the same as Islamist regulation. These cases must be central to any analysis of the phenomenon of religious freedom across the Muslim world.