Bluebird Group on growth track despite COVID-19
Despite providing an essential service, Indonesian taxi group Bluebird has not been spared from the fallout brought about by COVID-19. Indeed, the transportation sector is one of the hardest hit in Indonesia. According to the Indonesian Chambers of Commerce and Industry, the sector experienced a 50 per cent decline in revenue after the pandemic spread to the country.
But while the group has had to cut back on some expansion plans like adding to its electric fleet, it remains committed to bringing their taxi empire to the next level.
People-focused business
A lot of their efforts are aimed at people – both its employees and customers. President director Noni Purnomo is quick to recount her late grandmother and founder of Bluebird, Mutiara Djokosoetono’s philosophy: Only happy people can make other people happy.
“And so that’s the underlying reason for everything we do,” she says.
“We are still giving scholarships to the children of our drivers and employees even though we got hit by COVID-19 badly because we understand that our investment is in the longer-term relationships. So that is extremely important for us.”
Ms Purnomo herself established Bluebird Peduli (Bluebird Care), the philanthropic division of Bluebird Group. Through various initiatives under Bluebird Peduli, including its women’s empowerment programme ‘Kartini Bluebird’, they could potentially support more than 40,000 wives of Bluebird Group drivers and employees with small loans and training to start their own businesses.
This is all going ahead at full steam even as the company decided to cut back on some of its expansion plans. Bluebird made headlines last year, as the first taxi company in Indonesia to go electric to make good on its vision of protecting the environment. The company launched 29 electric vehicles out of the original plan to add 200.
“We’re postponing the addition of the (electric) fleet because we have to save on capital for now. But that doesn’t mean we’re not going to continue. Part of our vision is to be a sustainable company, which means we have to take care of the environment,” says Ms Purnomo.
Branching into new fields
2019 was a busy year for Bluebird. In January, they set up a joint venture with Japan’s Mitsubishi UFJ Lease & Finance and a local company to sell second-hand cars. In the same month, they signed the first deal under its Bluebird Friend programme, partnering with a local taxi company in Yogyakarta. Under the revenue sharing programme, Bluebird will help the latter renew its fleet and provide driver education while the partner will run Bluebird-branded taxis, in a move to expand the market. In March, they acquired Cititrans, which runs intercity shuttle buses.
Fresh from putting all the pieces in place, and ready to take on bigger challenges, 2020 was supposed to be the year of accelerated execution. But while COVID-19 may have diverted some of these plans, the group is taking it in its stride.
It helps that they are able to leverage their strength – a large and trustworthy fleet of vehicles, and public trust in their high standards.
Every single one of the cars in Bluebird’s fleet is owned by the operator, and so every vehicle is returned to them at the end of each day. The cars go through a thorough disinfection process, and the company checks in with each of their drivers to make sure they are not feeling sick.
In recognition of this, earlier this year the Ministry of Tourism and Creative Economy partnered Bluebird to provide transport for medical workers and task force members in the Indonesian capital.
It is also notable that the group has been actively looking for ways to expand their range of services.
They have, for instance, rolled out a special delivery service Bluebird COD (Chat-Order-Delivery) and BirdKirim in response to COVID-19, as citizens were encouraged to stay home to flatten the curve. This new service sees the publicly listed company work with supermarkets and hotels to deliver items such as groceries bought in a shop or documents, to and from customers using the company’s fleet.
They have also expanded this service into the business-to-business space.
“We have been working together with the fast-moving consumer goods sector and we offer warehouse-to-warehouse, one pickup to multiple drop-offs options. In certain cases, we’re much cheaper than other kinds of transportation,” says Ms Purnomo.
We strongly believe that in order to have sustainable growth, we need long-term partnerships. [And] a good partnership requires a shared vision. That’s what we see in Standard Chartered, a reliable bank we can count on that shares the vision.
Getting future-ready
The group is currently working on a series of interesting projects.
One key feature of the new services rolled out in recent months for instance, is that payment is done digitally.
“We’re really accelerating our plans for our digital payment systems because we want it to be less cash reliant. At the moment, it’s still impossible to go cashless because for example, our drivers often eat at small stalls by the street, and not every petrol station takes a certain type of e-money for example. There are still challenges but I think everyone is working towards digitalisation,” says Ms Purnomo.
Their relationship with Standard Chartered Bank puts them in good stead. The group started with the bank in 2019 when they were looking for ways to work with banks and other tech providers to ramp up their efficiencies.
Bluebird has been using Standard Chartered’s Virtual Payment Solution since Q4 2019, a system that helps them identify and segregate payment flow at the branch level. In February this year, Bluebird mandated Standard Chartered as one of their main payment banks through seamless end-to-end system integration with their Enterprise Resource Planner (ERP). This host-to-host connectivity enables straight through payment flow, thereby eliminating manual payment file upload and enables them to automate their operational transactions.
According to Mr Haryanto Suganda, Head of Corporate, Commercial & Institutional Banking, Indonesia, at Standard Chartered, the Bank is the only financial institution in Indonesia that provides Virtual Account Payment Solutions offering non-physical account with complete feature of payment and reporting solution.
This virtually-advanced service by Standard Chartered provides clients with numerous benefits, including complete visibility and control over operating accounts across their branches with automated handling and reconciliation of fund movements, reduces risk exposure of cash leakage, eliminates idle cash through auto processing of petty cash disbursal/payment and account rationalisation with payment execution without the need to create another physical account.
Says Ms Purnomo: “We strongly believe that in order to have sustainable growth, we need long-term partnerships. A good partnership requires a shared vision. That’s what we see in Standard Chartered, a reliable bank that shares the vision and we can count on.”
Bluebird is also looking to leverage data more actively. The company has in fact piloted its own Internet of Things (loT) system which allows their data centre to monitor everything, from engine to vehicle location and to driver performance. The plan is to get the entire fleet of 30,000 taxis and buses to be IoT enabled.
“We own the asset, so we need every single vehicle to be productive and that’s why we monitor the movement of the vehicles. We can also then collect data on how much distance each car has covered so we can schedule maintenance works,” says Ms Purnomo.
They are also looking to collect more data to better understand customer flows and ultimately incorporate it into their loyalty system.
“We have worked with Salesforce to build our CRM so we are working on doing that, but first we need to collect the data,” she says.
The company is arguably well-positioned for the “new normal”. Following COVID-19, there will be greater emphasis on low touch economy and hygiene, so Bluebird’s investment in non-cash payments and digital bookings will ensure that we are part of the new economy, says Ms Purnomo.
Indeed, she exudes a notable sense of optimism. “If COVID-19 hadn’t happened, we might not have branched into these different areas,” she says. “The pandemic has helped Bluebird develop new muscles and transform from an elephant into a cheetah.”
Source: The Business Times © Singapore Press Holdings Limited. Permission required for reproduction
Photo source: Bluebird group