The Unchecked Power of Indonesia’s Tech Giants

Essay #9 in the Data and Pandemic Politics series on data justice and COVID-19

Editors’ Note: In this post, Josia Paska Darmawan explores how ‘super-apps’—apps which connect users to multiple services and functions, often including public services—are being foregrounded by the pandemic. These apps centralise data on consumers among a few powerful actors, incentivise corruption by creating private capture of public services, and create dependencies on the part of government.

The editors would like to thank the Rule of Law Programme Asia, Konrad-Adenauer-Stiftung for their support in curating this essay.

In 2019, Gojek launched a campaign to introduce their platform as a “super-app”. Moving beyond the ride-hailing sector, Gojek has expanded into other on-demand services, such as delivery, online payment, movie streaming and the now-defunct massage and cleaning services. More recently, Gojek and Tokopedia—the leading e-commerce platform in Indonesia—announced their merger to form GoTo Group. This further consolidates different online services under one big corporation.

Gojek is not the only super-app in Indonesia. Gojek’s main competitor, Singapore-based Grab, began to expand its services in 2016 by adding lifestyle and financial services into their platform. Other local tech companies such as Bukalapak and Traveloka have also expanded beyond their main services by offering products from different sectors; a move that mimics the expansion of Gojek and Grab. By leveraging their consumer base, these tech giants are able to diversify their business and cross-sell these new products to increase their revenue.

There are some benefits that consumers could gain from using these super-apps. Transactions for different services becomes more convenient as they are offered multiple options within one application. Consumers, therefore, do not need to install different applications to carry out different tasks. As many companies use their own online payment system, consumers can also simplify their transactions by only using one e-payment. Additionally, consumers can rack up loyalty points easily due to the more frequent use of the application. As a result, consumers are able to procure services at a lower cost.

Despite these benefits, super-apps also pose several risks for the consumers. The expansion of these companies across various sectors weakens the consumers’ bargaining power. Companies will be able to collect more volume and variety of data from the consumers. This massive collection of data can also be used for other purposes that might not be known by the consumers. For example, the location data that a company has collected from their ride-hailing services might be used by other services within this company, even if the consumer has never used these other services before. The company can also use this data for consumer profiling and to influence purchasing behavior.

From the government standpoint, the rise of domestic super-apps is a double-edged sword. Homegrown tech giants are regarded as the nation’s pride. The government often praises these companies for their contribution towards Indonesia’s economy. Gojek, whose many campaigns highlight its identity as a local product, was reported to have roughly two million registered drivers, with an estimated contribution of IDR 8.2 trillion (USD 596 million) towards Indonesia’s economy in 2019. The growth of local startups can also prevent foreign companies from dominating the Indonesian market, thus pushing the government to encourage the growth and expansion of local tech companies.

However, these companies do not only expand to other business sectors, but also to the political sphere. There have been many examples where tech company executives are selected to join the government. Nadiem Makarim, the co-founder and former CEO of Gojek, is the prime example of it. He was appointed as the Minister of Education and Culture in 2019. This appointment came as a surprise as people expected him to join the Ministry of Digital Economy—then rumored to be a new ministry under Joko Widodo’s second-term presidency. The founder and CEO of Amartha, Andi Taufan Garuda Putra, and the co-founder and director of Ruangguru, Adamas Belva Syah Devara, were also appointed by Joko Widodo as special staff.

The government also partners with tech companies to deliver public services. Gojek has collaborated with the government and other actors to deliver vaccines across 29 cities and districts. The company contributed to this effort by providing a registration platform through GoTix and offering transportation for participants, medical staff, and volunteers. This partnership was lauded by the government, as it helped the distribution of vaccines, especially to cities outside of Jakarta. In addition to assisting the pandemic measures, Gojek has also been selected as a partner to distribute loans through DigiKU—a government program which aims to develop small and medium enterprises. These examples show that the big tech has slowly creeped into public service provision in Indonesia.

The involvement of companies in public services would make it easier for them to push their interests by shaping government’s programs. Ruangguru, an edutech company, was criticized for being a partner of the government’s pre-employment card program. People suspected that there was a conflict of interest in Ruangguru’s selection due to Devara’s double roles as the director of Ruangguru and a special staff for the President. After much scrutiny, Devara finally stepped down from his position as a special staff in April 2020, followed by the withdrawal of Ruangguru as a partner of the program in November 2020. Andi Taufan also resigned from his special staff position in April 2020 following an allegation of conflict of interest. He was criticized for using his position as a special staff to ask district heads across Indonesia to support his company’s program.

Additionally, the government will be overly reliant on corporate actors to deliver essential services. This may lead to the decrease of government’s bargaining position against companies. For example, at the start of the pandemic, the Ministry of Health prohibited the operations of GrabBike and GoRide—the motorbike taxi services of Grab and Gojek—due to social distancing measures. However, Gojek and Grab have become two of the leading transportation providers, especially in Indonesia’s urban areas. This prohibition, therefore, received polarizing responses from the public and some government officials. Those who were against this measure argued that many people have relied on these two services, not only for daily transportation, but also as their main source of income. Soon after, the Ad Interim Transportation Minister canceled this prohibition by issuing a ministerial regulation that gives permission for motorbike taxis to continue their operations.

Looking at these cases, we can see how technology companies have accrued social and political capitals from their business expansion. The COVID-19 pandemic accelerates the growing influence of these firms as the government relies on their technical expertise to help with the mitigation of the pandemic. This transgression of companies into public services could weaken the government and enable the insertion of corporate interests into public service provision.

Unfortunately, the government seems unable, and in some parts, reluctant, to limit the encroachment of these tech giants. The appointment of tech executives into government roles and the increasing involvement of tech companies in various programs signal their positive attitude towards tech companies. Additionally, the government is also pressured to accommodate the needs of these companies due to the increasing dependency on platform economy. Therefore, it is safe to say that tech companies will keep increasing their presence in public sphere unless the government start regulating the unchecked expansion of these giants.

Josia Paska Darmawan is the Manager of Digital Intelligence Lab at the Center for Digital Studies, Universitas Gadjah Mada, in Indonesia. Paska holds a Master of Science degree from Georgia Institute of Technology, USA with a specialization in social data analytics. Their research interests include digital culture, queer internet studies, and the gig economy.

Suggested citation: Darmawan, J. P. (2021, November 18). The Unchecked Power of Indonesia’s Tech Giants. Data and Pandemic Politics, 9.

About the project

Places and populations that were previously digitally invisible are now part of a ‘data revolution’ that is being hailed as a transformative tool for human and economic development. Yet this unprecedented expansion of the power to digitally monitor, sort, and intervene is not well connected to the idea of social justice, nor is there a clear concept of how broader access to the benefits of data technologies can be achieved without amplifying misrepresentation, discrimination, and power asymmetries.

We therefore need a new framework for data justice integrating data privacy, non-discrimination, and non-use of data technologies into the same framework as positive freedoms such as representation and access to data. This project will research the lived experience of data technologies in high- and low-income countries worldwide, seeking to understand people’s basic needs with regard to these technologies. We will also seek the perspectives of civil society organisations, technology companies, and policymakers.