As the top mobility provider in Indonesia, PT Blue Bird Tbk’s financials look unbeatable. As of April 2023, after the 50th anniversary of the company, Blue Bird’s revenue had grown 62 per cent from 2021 with most of it due to the 72 per cent rise in increased earnings from its taxi segment. 

Significantly, Blue Bird won the Top United Nations Sustainable Development Goals (UN SDGs) Award in November 2022 from two brand and media agencies ― a recognition of Blue Bird’s successful endeavour in translating its goal of sustainable growth into practice through its various initiatives in energy reduction, environmental conservation, and community building.

Riding on Indonesia’s economy

Three conditions have contributed to Blue Bird’s ascent. The first is that Indonesia is one of the world’s fastest-growing economies. Pre-pandemic, its GDP was growing at five per cent annually. This fell in 2021 but rebounded to 5.3 per cent in 2022 – hitting a nine-year high. Interestingly, car ownership in Indonesia is just four per cent, unlike the rest of Southeast Asia, offering a huge opportunity for ride-hailing and private passenger transport businesses. Second, Indonesia is a huge proponent of reducing global warming as its 17,500 islands are susceptible to the impact of rising sea levels due to climate change. It aims to transition from fossil fuels by leveraging solar, geothermal and hydro renewable energy sources. Third, Indonesia seeks to produce batteries for EVs at scale because as much as a quarter of the world’s nickel reserves are located in the country. 

Over the years, Sigit Priawan Djokosoetono, President Director of PT Blue Bird Tbk, and his team had steered Blue Bird to take advantage of these megatrends for its growth. The company began in 1965 when Mutiara Siti Fatimah Djokosoetoeno, or Bu Djoko as she was affectionately known, founded the precursor to Blue Bird to support her family after her husband’s death. The fledgling taxi company was officially named Blue Bird in 1972, and its focus on service excellence is captured in its motto, Setiap Kilometer Berarti (Every Kilometre Counts).

It grew to become the country’s largest taxi provider, with a fleet of more than 26,000 vehicles by 2014 when the company was publicly listed on the Indonesia Stock Exchange. Despite brutal competition in the 2010s, Blue Bird chose in 2017 to collaborate with ride hailer and tech giant Gojek, allowing its customers to book taxis on the latter’s app, in addition to its own app MyBluebird which it had launched in 2016. This was meant to show what Blue Bird calls ‘coopetition’, a tactic that could potentially reap better rewards for all parties than engaging in brutal, no-holds-barred competition.

Harnessing EVs

The year 2019 marked another milestone for Blue Bird as it introduced its inaugural fleet of EVs, with an initial purchase of 29 vehicles. It also launched its joint venture with Japan’s Mitsubishi UFJ Group which focused on car auctions to sell used cars. it went beyond taxis and rented vehicles by acquiring Cititrans, a market leader in the executive shuttle segment, and a top player in the inter-city shuttle business. For Pak Sigit, innovation was second nature, but the COVID-19 pandemic was to be an even more transformative experience.

Going omnichannel with a MaaS model under COVID-19

Revenue plunged by 70 per cent in March and April 2020, as COVID-19 hit Indonesia hard. The company prioritised the health and well-being of its staff and customers. As Pak Sigit explained, “We believe that managing people is the most important thing in handling transportation, besides managing the fleet itself. So, from the beginning, we always put the human, our drivers, and their welfare as our top priority.”

Blue Bird focused on the well-being of its customers by providing a broader range of payment options, especially cashless or contactless modes, such as GoPay, as hygiene had become the new currency during the pandemic. This further fuelled its digital transformation efforts.

In 2021, amidst coping with the COVID-19 crisis, Blue Bird articulated its ‘Mobility as a Service’ (MaaS) vision. By building a MaaS ecosystem that integrated the company’s products and services with its channels and payment options, it aimed to be bolder in its use of technology, including Artificial Intelligence (AI) and Machine Learning (ML). This embryonic blueprint for enabling omni-channel, agnostic payment, and product strategy was subsequently formalised as the company’s ‘3M’ approach, representing multi-channel, multi-payment, and multi-product.

As of 2022, PT Blue Bird Tbk and its subsidiaries focused on taxi operations, car rental, car auction, and shuttle, as well as chartered bus services and logistics services under the brand name Bluebird Kirim. Supporting its 3M strategies are five technology pillars, specifically location intelligence using IoT, mobility apps, Big Data analytics, AI, and data security.

Keeping focused on the community as Blue Bird aims ever higher

Pak Sigit went on to announce in April 2022 that the company would halve its waste and emissions by 2030, in the pursuit of its twin strategy of accelerating digital transformation while driving sustainability.

Even since the 1980s, Blue Bird has had a habit of constantly updating and refreshing its customer-facing technologies, and improving its internal corporate enterprise-level platforms. It implemented its SAP Enterprise Resource Planning system in 2003, putting in place modules that served functions in finance and sales, as well as operations, such as fleet management and driver management. Essentially, it was able to have a more integrated, end-to-end view of its costs and revenues for more responsive planning, allowing it to digitise and clean up its various data repositories, thus setting the stage for more transformative digitalisation for the future.

Even before corporate social responsibility became de rigeur for organisations, Blue Bird was already pursuing it. Some examples include switching to fuels such as compressed natural gas (CNG) which produced 75 per cent lower emissions than other fossil fuels. It also installed solar panels to improve its energy use mix, such as in its depots. It disbursed more than 36,000 scholarships, empowered more than 400 women through a scholarship programme, and had set up Bluebird Academy which transformed its staff training centre into an open learning platform for the public.

The EV ecosystem: A new electric dream?

It also experimented with the use of electric vehicles in its fleet, as it had envisioned that one in 10 of the entire fleet would be EVs by 2030.

As a trial, Blue Bird chose high utilisation to stress test EV performance by running EVs continuously for 24 hours with two shifts of drivers. According to Pak Sigit, it would also be a valuable learning experience for its drivers, “For example, they need to figure out when would be a good time to charge the vehicle and learn to deal with practical issues, such as how long can an EV run on 30 per cent of battery?” The trial showed that indeed EVs incurred lower maintenance costs compared to petrol-run vehicles. In June 2022, the company initiated another pilot study on deploying EVs in Bali, to test the rolling out of EVs outside of Greater Jakarta.

Beyond the dollars and cents of using EVs in its fleet, Blue Bird was considering the broader ecosystem for EV adoption. The after-sales services and EV battery market could be promising, given that its batteries could last as long as 20 years and be repurposed for other uses. If the EV battery industry were to take off in Indonesia, the recycling industry would likely grow as well. It was also considering other aspects, such as building its capability in EV car dealership, as well as venturing into providing EV maintenance and related instructional courses. The training could also provide a pipeline to grow technical talent who would be attracted to join Blue Bird’s family.

The newly-minted 3M strategy in 2022 would help realise its MaaS vision. Give it a few more years, Pak Sigit envisioned, and a more efficient, sustainable, and digitally advanced Blue Bird would soar high in the skies.

Stressing his company’s focus on making life better for the community, he said: “Blue Bird is different from other taxi companies. We embrace our human connection.”

The case “Transforming Blue Bird: Indonesia’s Top Mobility Provider’s Push for Sustainable Growth and Digitalisation in the Post-Covid Era” is written by Associate Professor of Accounting (Education) of Singapore Management University (SMU) Yuanto Kusnadi and Dr Wee-Kiat Lim, Associate Director at SMU’s Centre for Management Practice. To read it in full, please visit the CMP website by clicking here.