Measuring the Real Prospects of the Electric Scooter Business in Indonesia

The electric scooter or e-scooter rental business has found momentum again after the regulations governing it were published. One of the most important things from the issuance of these regulations is the government ensure the existence of electric scooters and their use.

Regulations regarding electric scooters are contained in Minister of Transportation Regulation Number 45 of 2020 regarding Certain Vehicles Using Electric Motor Drives. The regulation was issued in mid-June. Grab perhaps one of the parties that most welcomed this one regulation.

Grab ventured into the electric scooter rental business since May 2019 under the name GrabWheels. Since its launch in the Jabodetabek area, GrabWheels managed to steal the attention of many people. Their electric scooters are often seen anywhere. But a accident which killed two users GrabWheels at the end of last year forced Grab temporarily halting its electric scooter service.

Reborn

Months after the unfortunate incident, Grab now relaunching GrabWheels. They held the relaunch together with the Minister of Transportation Budi Karya Sumadi. President Grab Indonesia Ridzki Kramadibrata explained that a number of adjustments were made to meet the demands of regulatory standards.

Ridzki explained that now they are preparing a station manager and a special task force tasked with checking and managing GrabWheels. Station manager tasked with managing the unit GrabWheels include disinfection, while the task force is tasked with ensuring users comply with security, safety and cleanliness protocols.

"We also encourage users to bring helmets and provide them at each endpoint GrabWheels," explained Ridzki.

Ridzki confirmed that it is now operational again GrabWheels are still limited seven locations in Jakarta with approx 200 units of electric scooters. These locations include the Kuningan City area, Lotte Shopping Avenue, BRI Building 2, Thamrin 10, Intiland Tower, Blok M Square, and Blok M Mall. Meanwhile, in terms of tariff, the reward is IDR 10.000 per 30 minutes.

Looking for the best potential

Ridzki emphasized that as an alternative form of transportation, electric scooters will be optimally used as a mode first mile and last mile that can integrate with existing transportation systems. But when GrabWheels were widely used at the end of last year, with some users using electric scooters for recreation only.

Grab did not reveal in detail their plans with electric scooters. There is certainly a reason for their return after stopping operations. See how persistent they are in defending it GrabWheels, it is not impossible that there is quite a big potential waiting in this electric scooter business.

In the formulation McKinsey, electric scooters are one of the micromobility category vehicles. They caught the electric scooter trend creating no small economic potential. In 2019, McKinsey estimates The micromobility industry could be worth around US$300-500 billion by 2030. However, since the pandemic struck, the use of micromobility, including electric scooters, has fallen by 50% -60%.

Head of Strategic MDI Ventures Aldi Adrian Hartanto agrees that regulations guarantee the use of electric scooters. However, from a business perspective, according to him, the success or failure of electric scooters will not be seen in a short time.

MDI Ventures is one of the investors in a startup that specifically provides e-scooter rental services called Beam. Beam electric scooters can be found in Malaysia, South Korea, Australia, New Zealand and Taiwan. You can actually find e-scooters from Beam in a number of locations in Jakarta. But specifically here, its existence is still limited testing the water.

Aldi said this happened because using an e-scooter requires a number of conditions. Integrated road and transportation infrastructure are two important things that can support the use of electric scooters. That's why Beam prioritizes densely populated cities in developed countries which generally meet these two conditions.

"We see the potential for e-scooters short distance mobility for a distance of around 3-5 kilometers which has good infrastructure or under 3 kilometers which is not so good. We believe this is a solution if the walk is a distance but if you go up ride hailing it's expensive," added Aldi.

Jakarta, as a city that has the most ideal criteria for electric scooters, is increasingly friendly to non-motorized vehicle users. By allowing electric scooters to pass along bicycle lanes, scooters can pass along the entire length of the track 63 kilometers. Several integrated transportation points have also appeared.

Looking for alternatives

Apart from the pandemic factor, the electric scooter business is still quite complicated. Regulations regarding safety are still a major issue. However, on the other hand, the sustainability of this rental business is another challenge that must be overcome by the players.

However, according to Aldi, there are still some use case An alternative that can be tried is to use an electric scooter as a recreational vehicle. This has already happened to GrabWheels experienced the peak of its popularity last year.

He gave the example that electric scooters could be directed as an option for travelers in recreational areas such as Monas. Aldi also said that Beam is still studying other possibilities by collaborating with offices that have quite large areas. Therefore, he believes that the use of electric scooters will take quite a long time in Indonesia.

"We so far see it [needs] long term in developing countries," he concluded.