Blue Bird's Maneuver to Face the Pandemic Through Digital Acceleration

When Gojek and platforms on-demand while others operate commercially, a number of conventional transportation service providers shouted. Gojek considered to have disrupted the existing transportation business. The presence of a service like this even gave rise to a feud between conventional vs. conventional transportation providers on-demand.

A few years later, the situation was reversed. Conventional transportation service providers as well as on-demand are now embracing each other toleverage new opportunities through technology.

The above context also applies to the largest taxi operator in Indonesia, Blue Bird, which in the end collaborate with Gojek in 2016. Corporations increasingly see the essence of digitalization for business continuity. 

Then how does Blue Bird maneuver to deal with digital developments, especially during the pandemic? Read more through the interview DailySocial with Blue Bird's Chief Strategy Officer Paul Soegianto.

Blue Bird's digital transformation

Talking about digital transformation, Blue Bird is considered to need to take new steps with its position as the largest taxi operator in Indonesia. Moreover, technology has changed how the market behaves.

From 2015 to 2019, Blue Bird recorded a decline in its financial performance. The peak of this decline began to be seen in Blue Bird's revenue in the 2015-2017 period, at which time the popularity of transportation services on-demand is skyrocketing in a number of big cities in Indonesia.

What is not widely known is that Blue Bird actually developed the My Blue Bird taxi ordering application around 2011/2012. It can be said that this application has been launched much earlier Gojek.

Menurut Ande Putra, the former Chief Information Officer of Blue Bird in a previous interview, My Blue Bird was not promoted well so its popularity has not been able to catch up with transportation on-demand.

Now, Paul Soegianto is in charge of digital transformation which has been intensively carried out since last year by the Strategic Transformation Office (STO) division to manage the company's strategy, portfolio and digital transformation. Previously, the digital transformation was executed by the Business Transformation Office (BTO) division.

Paul revealed that there were a number of new initiatives to accelerate his business. As an asset-based company, he believes that Blue Bird needs to differentiate from its competitors. As of the end of 2019, Blue Bird had 20.633 units of regular taxis, 883 units of executive taxis, 6.231 units of limousines and rental cars, and 601 units of buses.

Its main focus is to be Mobility-as-a-Service (MaaS) where the company uses three main approaches, namely being a provider multiplatform/channel, multiproduct/serviceand multipayment. The goal is none other than to create an integrated service ecosystem and strengthen its position in the transportation industry in the digital era.

first approach, multi-channel, is to expand access to Blue Bird transportation services in more than one channel. Previously, this service was already available in Gojek and Traveloka. "We will expand channel this, there will be the end of September," he said at the session virtual meets with DailySocial.

Currently, My Blue Bird is the company's main platform for ordering taxis. According to Paul, the application will come with a number of updates in December.

Blue Bird also differentiates services outside of transportation services, namely car and bus rental, as well as logistics. Paul also targets that the service can also be ordered through multiplatform.

"Related mobility partnerships, we will also announce a collaboration with one of the biggest companies in Indonesia for multimodal services. This is related to multiproduct/service earlier," said Paul.

Last is multipayment. Various payment options are considered to be one of the main keys in the era of service inclusiveness. Especially the entry Gojek as a minority shareholder of Blue Bird will allow integration of GoPay into My Blue Bird service.

"All Blue Bird services accept cashless payments, including digital platforms. In fact, since the last four months, we have roll out Quick Response Code Indonesian Standard (QRIS) to 12.000 Blue Bird fleets and has been completed," he added.

Equally important, continued Paul, the company is also trying to digitize all taxi fleets over the past month. Paul revealed that now every fleet is equipped with a front panel that can measure sensors in the taxi, doing tracking accurate with GPS, and security management.

"We support the cutting edge (drivers) with technology, such as IoT and AI. Now we are again moving everything to cloud based. Our system and network too revamp so that all new at the end of this year. This is all to convince consumers that we can meet good factor our services," he said.

Log in to logistics services

The COVID-19 pandemic has hit the world's transportation sector very hard. The impact was also felt by Blue Bird due to the social restriction policy that required work and school activities at home.

Based on performance in the second quarter of 2020, Blue Bird experienced a significant decline in total revenue and profit. The pandemic caused the contribution of revenue from Blue Bird's taxi services to drop by 43 percent to Rp.865 billion compared to the same period last year of Rp.1,5 trillion.

Blue Bird has been maneuvering by entering logistics services since last March. The company introduced the Blue Bird COD (Chat-Order-Delivery) program which can be ordered via WhatsApp. This service is available for the Greater Jakarta, Bandung, Semarang, Surabaya, Bali, Medan, Padang, Pekanbaru, Batam, and Palembang areas.

This COD program was later developed into a new service, BirdKirim. Customers can deliver goods or documents whose rates are adjusted to the shipping distance. The service available in the My Bluebird application was introduced last June.

"Now we are just waiting for the [development] for wholesale logistics services, so it can be ordered via the application as well. For us, logistics services for corporations are very attractive. Already many large companies are moving their logistics services to us. There are [platforms] B2B e-commerce that the logistics delivery is already using Blue Bird services, it's just that we can't announce it yet," he explained.

In addition, Paul revealed that his party plans to announce a collaboration with a logistics startup that has been running since last March. Through this collaborative effort, the company projects good growth of logistics services.

Determine "Make-or-buy decisions"

Talking about the development of innovation, both alone and in collaboration, of course it takes a solid commitment from top level. In the process, Paul emphasized the importance of implementing strategy "make-or-buy decision".

According to him, this model has not been implemented properly by many companies in Indonesia. At Blue Bird itself, Paul admitted that he continues to observe the company's capabilities to understand the need for self-development, self-management, or collaboration with third parties.

In fact, this model is familiar to corporations. Generally, the strategy of buying through acquisitions is often chosen because it is more efficient in terms of time and resources. And this concept is considered faster todeliver service on the market. However, there is no harm in developing it yourself as long as there is sufficient and qualified capital and resources.

In this context, Blue Bird's minority shares have even been acquired Gojek worth $30 million or around IDR411 billion) in February 2020.

Until now, it is not known what the big plan behind the purchase of Blue Bird shares by Gojek. To be sure, Blue Bird is currently preparing a beneficial synergy for both parties. Paul himself refused to comment regarding the next plan of the acquisition.

"Some things that are not within Blue Bird's competence, we will definitely buy them. This means that this buying scheme is for long term partnership. Soon, Blue Bird will sign a big contract regarding this," he said.