Transaction Costs on Online Transportation Partnership: An Empirical Study in Malang, Indonesia

Dodi Dermawan,G Jameson,I Gibson,L.W Feng,T Yamamoto,H Pardi

doi:10.1051/e3sconf/202132407001

Abstract

This study uses a digital platform with a partnership pattern between application companies and online transportation drivers. Previous studies reported that digital platforms were able to reduce transaction costs. This study aims to identify transaction costs in online transportation partnerships in Malang, Indonesia. Using a qualitative approach with interactive analysis, the informant is a two-wheeled online transportation driver in Malang City. This study revealed that several transaction costs in online transportation namely negotiated transaction costs when the driver is suspended and supervision transaction cost when the driver got problems with an error application server, lost internet network, parking fees for pick-up, and fake orders from customers. Further, transaction costs are also uncertain since the company’s application regulations frequently change overtime. Despite the transaction fees, the drivers’ overall income were much better compared to their previous job. To reduce these transaction costs, government regulations are needed to balance the rights of drivers. Moreover, the company could replace the suspension with a fine of a certain amount. Changes to rules and policies must accommodate input from driver partners since they are more aware of actual conditions.

Highlights

The development of digital platforms in business is rapidly growing in order to meet the needs of customers with high mobility
The current development of the sharing economy jeopardizes the nature of the sharing economy concept since many sharing economy actors such as online drivers are switching from part-time to full-time jobs [7]
Transaction costs in transaction uncertainty are when company rules change frequently

Summary

Introduction

The development of digital platforms in business is rapidly growing in order to meet the needs of customers with high mobility. Application companies in the online transportation business are companies that use digital platforms. They serve as intermediaries between drivers and consumers who want alternative transportation to avoid traffic jams, ease of use, fast, safe and low cost. The online transportation business model is part of the sharing economy which acts as an intermediary between stakeholders to conduct transactions [1]. This business model has changed ecosystems, markets, and work and consumption patterns [1,2,3]. The online transportation business model using a digital platform is different from the usual transportation business. The current development of the sharing economy jeopardizes the nature of the sharing economy concept since many sharing economy actors such as online drivers are switching from part-time to full-time jobs [7]

Objectives

Methods

Discussion

Conclusion