It’s no secret that a significant part of passenger and carrier transportation in Indonesia is being operated by using motorcycles.

Bikes are the most popular type of transport in Indonesia due to the local road systems and narrow streets. But more importantly, they come at a lower cost compared to cars, and their overall maintenance is more affordable.

Additionally, Indonesian cities are known for serious traffic jams and dense traffic. Motorbikes help carriers to move more easily and quickly under such conditions. With their good manoeuvrability and the ability to navigate through narrow passages and dense traffic, motorbikes are attractive for transporting passengers and goods in urban settings.

Despite the obvious advantages of using motorbikes for passenger and courier transportation, Indonesian carriers face a number of challenges.

Meet Dede Suherman

Dede Suherman is a common Indonesian carrier. Passenger carriage is everything Suherman is doing for living and supporting his family. He was facing some financial struggles due to frequent bike breakdowns, but couldn’t afford a new one. At the same time, his credit applications were being rejected by numerous banks due to the inconsistency of the scoring system with the type of his occupation.

Once, while waiting for his bike to go through another repair in the workshop, Suherman was scrolling through his Instagram feed. He came across an advertisement for a subscription service offering new motorcycles from IVITECH.Drive. Despite getting used to his applications always being rejected, Suherman decided to try his luck.

This time, things were different: after the application went through the review process, it was accepted. Suherman received a new bike through a subscription with small daily payments. Here’s what he says about this experience:

“Honestly, I wasn’t expecting much. I got tired of regular refuse from banks. Being approved made me see that fintech is open to everyone. These instruments offer fantastic deals alongside affordable and comfortable payment methods. The registration process was easy and seamless, making the entire experience enjoyable.

“I believe that with such services, the whole industry will be able to thrive and make transportation fast and affordable with minimum expenses for drivers and passengers. I’m delighted to have a new electrobike and get back to my work.”

Also Read: How startups can help solve Indonesia’s environmental crisis

Suherman is just one of the thousands of Indonesian drivers who got the opportunity to do their work without worrying about tomorrow. Now, let’s review the most frequent struggles that are being faced daily by Indonesian carriers. 

What does it take to be a carrier in Indonesia? 

Even though the Indonesian ride-hailing market is valued at US$2.67 billion and is expected to cross a net valuation of US$4.66 billion, the drivers themselves are still facing a huge spectrum of issues. Here are the most common and critical ones: 

• High operating costs: Despite relatively lower maintenance costs for motorbikes, they can still be hard to cover for many carriers, especially if they aren’t part of a taxi fleet or vehicle owners themselves. Fuel, maintenance, insurance, and other operational expenses can significantly exceed carriers’ earnings.
• Access to financial services: Some carriers may struggle to access basic financial services such as loans or credit due to the non-standard nature of their work and the lack of a fair scoring system for businesses and individual carriers.
• Low earnings and income instability: Many carriers in Indonesia experience low earnings due to intense competition and market saturation. It is important to mention that frequent bike repairs are holding the drivers from their daily work and making them wait for transport to be fixed. This leads to income instability, making it difficult to cover expenses and support their families.

What can fintech do about it?  

Fintech can play a crucial role in solving the struggles of Indonesian carriers. The inability of banks to score carrier companies and individual drivers is a known issue that keeps the industry from developing and growing.

Fintech offers enterprises and entrepreneurs innovative scoring systems. Based on these analyses, banks can easily offer the needed funds without any risks. So, first and foremost, fintech makes it easier to apply for a loan and raises the chance of approval. 

The other way that fintech can become a saviour for the ride-hailing industry is that these platforms can provide affordable paying methods that will allow carriers to access bikes without the need for large initial investments. This can be implemented through small daily subscriptions, which will make bikes more accessible to those who face financial constraints.

Needless to say, fintech platforms encourage the “green revolution” of Indonesia’s motor scene by providing riders with eco-friendly electric bikes instead of old, dangerous and harmful fuel-powered ones.

Final thoughts

The story of Suherman tells us that we, as fintech startups, should develop our services to be able to help more and more people across the world solve their financial issues. Together we can help other services, such as taxi and delivery, to improve and rise. And this will most definitely make the world a better place.

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