Jakarta's traffic trials give rise to a tech success

Analysts say both Uber and Grab have greater scale and resources than Go-Jek, crucial for sustaining losses in the transport app industry's early stages and for keeping up investments in the behind-the-scenes technology that makes the apps easy for people to use.

Go-Jek has built on the usual strategy of providing rides to introduce a slew of additional Go- services to the app, including delivering food, groceries, cleaners, massage therapists and beauticians to homes.

Florian Hoppe, a partner at consulting company Bain who specializes in technology, said Go-Jek's approach is "fairly unique" but fits the situation in Jakarta and other Indonesian cities where service businesses are hobbled by transportation problems.

Makarim dreamed up Go-Jek for an independent study project while at Harvard Business School and started it as a sideline business when he returned to Indonesia in the summer.

Go-Jek says it has more than 200,000 drivers around Indonesia but the pain for taxis seems most acute in Jakarta, where all the ride hailing services are battling fiercely for customers, pushing fares to rock bottom.

Since a Go-Jek trip within the city costs only about 12,000 rupiah (90 cents) outside of peak hours, the company is burning through its investment cash because in Jakarta the fares are lower than what it pays drivers.

Yet the apps have proven so useful to people in a city where officials estimate congestion causes losses of $3 billion a year that attempts to ban them on the basis of claims of unfair competition have failed.