Case 5.

2
Blue Bird teams up with Gojek

Blue Bird and Gojek collabs?

Bluebird has long been one of the most successful taxi services in Indonesia, founded in
2001 they thrived in several cities in Indonesia. With more than 23000 cars in their arsenal,
their power over the consumers seems indisputable. There’s a good old day whenever you want
to commute safely and at a reasonable price then there’s only one option in mind (especially
when you’re living in a big city). And at that market, Bluebird dominate.

But that’s an old story, just before Gojek come and kickstart the ride-sharing business in
Indonesia. They’re amassing lots of fame and grew almost overnight. In such a short period of
time, they’re now the largest transportation provider and soon will be facing several opponents
namely big taxi companies and local ojek which feel threatened by their presence in the market.
As a young company in this high growth business where the growth is the only important
measurement for investors, you don’t want to mess with several big players at the same time
and having your growth hampered as a result of your ego to confront them directly. And Gojek
did just that, avoiding the competition until they’re big enough to smash them. They’re
amassing power at an unprecedented rate.

In 2017, Indonesia's biggest taxi operator, Blue Bird, has teamed up with homegrown
motorcycle taxi ride-hailing application Gojek in an attempt to bolster its services despite
clashes during massive protests by drivers working for conventional taxi companies against the
application in March. The two companies have decided to join forces and form a partnership
involving technology, payment and promotion to help accelerate the digital revolution in
Indonesia and empower passengers. The cooperation will enable passengers to hail Blue Bird
taxis via the Gojek application.

Blue Bird launched owned its own application in 2011, but the market response is not
very good. Started as application to provide ojek (motorcycle taxis), Gojek has expanded its
business to include a variety of services. The latest is Go-Car, in which customers can hail a
taxi online, and Go-Tix, which facilitates Gojek customers in buying tickets for art, sports or
other events through the Gojek application. The new features are additions to a variety of
services offered by Gojek, such as Go-Busway, Go-Massage and Go-Box and Go-Food.
 The cooperation marks a new phase for Blue Bird and Gojek. Thousands of Blue Bird
taxi drivers rallied on the streets of Jakarta in March against the growing popularity of
application-based transportation services such as Gojek, Uber and Grab, which it claimed were
illegal entities. Fights broke out between striking Blue Bird drivers and those who kept
working.

Indonesian Government Support

The government fully supports this collaboration in terms of usage of technology

especially in the transportation sector. The government plays a part as a regulator and balancing
the competition in the businesses of transportation. The collaboration between Blue Bird and
Go-Jek is to show that two different business models can unite and hopefully improve the level
of transportation services in Indonesia. This collaboration is also a part of the process of
applying the government’s revision of ride-hailing rules that was implemented on April 1 2017.

This collaboration will create a ‘healthier’ business environment in land transportation

without neglecting aspects of safety and comfort. It will be great if existing conventional and
online transportation providers are able to work together to avoid conflicts. Go-Blue Bird is a
result of teamwork among transportation operators in Indonesia.

Indonesian Transportation Society (MTI) chairman Danang Parikesit lauded the

partnership, saying the public would see more such cooperation between conventional and
application-based transportation companies. “The synergy is good as customers can choose
between competitive services from providers. I hope that in the future there will be no conflicts
and I encourage other online transportation providers to join forces” Danang told. Danang
further said the government must issue regulations to accommodate rapid developments in the
transportation service sector, especially amid the emerging popularity of ride-hailing
applications. Moreover, the competition will encourage conventional land transportation
companies to keep up with developments in technology.

Go-Jek and Blue Bird teams up

For Go-Jek and Blue Bird, this collaboration is not only for business, but also contributes
to the community. In the Go-Jek application, customers can now order exclusively a Blue Bird
taxi and pay in accordance with the company's fare. This was a follow-up to a feature, which
included Blue Bird taxis in Go-Jek's standard car service.

" This collaboration is a long-term commitment by Go-Jek and Blue Bird to innovate and
give the best services to our community as well as improve the well-being of drivers. This can
be a good example that [such] collaboration is beneficial to the general public and will also be
beneficial to economic growth " Go-Jek Indonesia chief executive Nadiem Makarim said at a
launch event in Jakarta.
Blue Bird director Adrianto Djokosoetono said the new feature, dubbed as Go-Bluebird,
will allow taxi operators to get more orders. Blue Bird and Go-Jek have the same mission of
improving for the convenience of their customers. The cooperation is also expected to help
improve the welfare of taxi drivers, as the Go-Jek app should bring them more orders than the
company's in-house app My Blue Bird.

Blue Bird Group Holding president director Noni Purnomo shares her thoughts on how
Blue Bird innovates and contributes to business growth and the community at Endeavor Scale
Up Asia 2017 recently.
“One of the values in the company is sustainability. I remember before my grandmother
passed away in 2000, she told me that my responsibility now is not to the shareholders, but to
the drivers and their families, so I need to make sure that the company is sustainable in the long
run. With that in mind, I cannot just shut down the company once we face challenges, and trust
me, after 45 years in the business, the challenges are never ending, but that makes our company
build the agility to be able to adjust ourselves, to continue and persevere. Being able to learn,
understand the surroundings, and know your weaknesses and strengths, has become our source
of energy. To always adjust the strategy and innovate in the company, including working
together with Go-Jek, that is part of our strategy,” concludes Noni.
Currently, Blue Bird has a fleet of about 35,000 cars in 18 cities across Indonesia, which
will be a big addition to Go-Jek services. So far Go-Jek's app has been downloaded more than
40 million times. On the initial stage, Go-Bluebird will be available in the greater Jakarta area,
Surabaya, Bandung, Medan and Semarang.

Assignments

1. Reviews the case

2. Identify what is the problem from the perspective of organization theory (2 problems)
3. Answer the questions based on theory and support data (journals, books, company profile, and
etc). Support your argument with the theories in chapter 5 of Daft (2018), Organization
Theory and Design.
 Questions
1. Nowadays, organizations are more interdependent than ever before. Why organizations
should collaborate? What are the benefits for those who collaborate? What type of
organizations should collaborate? Discuss.
2. Based on the case and the theory of Chapter 5 Daft (2018), among four perspectives have
been developed to explain interorganizational relationships (Exhibit 5.2. A Framework
of Interorganizational Relationships), which one is the best suited to desribe such
relationships between Blue Bird and Gojek? Why?
3. Assume you are the manager of an organizations. Do you think operating as adversaries
is easier or more difficult than operating as partners with other organizations? What
actions you would take to survive and succeed? Discuss based on Exhibit 5.4 Changing
Characteristics of Interorganizational Relationships.

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