4EA19
ZAINAL RIADI, SPd., MSas
Conventional taxi companies can expect to hit a few potholes in the future as competition with app-based transportation companies such as Uber and Grab is projected to become tougher.
The arrival of the ride-hailing apps has adversely affected publicly listed PT Express Transindo Utama (TAXI) and PT Blue Bird (BIRD) as customers prefer the cheaper and more convenient services offered by the apps, said Koneksi Kapital analyst Alfred Nainggolan.
In the future, if Uber and Grab continue operations, it will be almost certain that investors will adjust their revenue, net profit and margin projections for Express and Blue Bird, he added.
“These two companies dominated the taxi industry before the ride-hailing apps started gaining popularity,” he said.
Express had a fleet of more than 11,000 vehicles in 12 cities in Sumatra, Java, Bali and Lombok as of 2014, with a market share of around 15 percent of the national taxi market, according to company data.
Meanwhile, Blue Bird’s fleet amounts to over 32,500 vehicles in more than 15 cities across the country, controlling approximately 43.5 percent share of the taxi market.
Alfred predicted that Express would suffer more than Blue Bird as the former is currently experiencing lower fleet utility due to a high rate of driver resignations. Express’s utility rate went down to 70 percent last year from 90 percent in 2014.
Investa Saran Mandiri analyst Hans Kwee said that with lower consumer purchasing power amid the general economic slowdown, the public would opt for cheaper services. “The conventional taxis’ business sizes will be smaller with the developments in public transportation,” he added.
Express’ financial statement showed that the firm suffered a 12.69 percent year-on-year (yoy) decline in revenue to Rp 721.41 billion (US$54.26 million) as of September last year while net profits nose-dived by 89.84 percent to Rp 11.08 billion.
Its stocks have lost around 81.82 percent of its value in the last year from its peak of Rp 1,155 recorded last April, reflecting investors’ lack of confidence in the company’s financial performance.
Bahana Securities analyst Yudi Tandi Anugrah wrote in an analysis that his firm was of the view that pressures from ride-hailing apps on both Blue Bird and Express would continue. “At this stage of the cycle, we expect continued intense competition and fewer drivers to restrict expansion and revenue growth, leading us to affirm our sector ‘underweight’ stance and reduce ratings of BIRD and TAXI,” he wrote.
Hans of Investa Saran Mandiri said that in order to survive the burgeoning competition, conventional taxi companies had to innovate their businesses, including by improving their services to provide efficiency for customers.
He added that the government should also implement more equable fare structures for the transportation companies as the ride-hailing apps offered subsidized tariffs resulting in cheaper prices.
Last Tuesday, some 12,000 conventional transportation drivers staged a protest accusing the government of failing to regulate the increasingly popular app-based transportation, thus hitting their incomes.
However, Blue Bird commissioner Noni Sri Ayati Purnomo said her firm’s drivers might feel their incomes had declined but the company’s had not.
“Corporate wise, we are growing,” she said.
Blue Bird’s financial report showed that the firm booked a 17.44 percent growth yoy in revenues to Rp 4.04 trillion as of September last year while its net profits jumped by 16.43 percent to Rp 625.42 billion.
