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Fikriyatul Falashifah_300408737_2017

Assignment 1 ENVIRONMENTAL MANAGEMENT

TECHNOLOGICAL CHANGE AND ENVIRONMENTAL IMPACTS:

A CASE STUDY OF SHARED-RIDE TRANSPORTATION SYSTEM IN INDONESIA

In todays era, communication technology is rapidly growing, followed by socio-economic

changes and environmental impacts. The phenomenon of technological development which is

currently being a matter of discussion among many is the developing technology towards a modern

transport business using sophisticated applications in the virtual world. Many businesses begin to

emerge with the advantage of technological developments, one of which is the emergence of

transportation services provider by using smartphone applications, or better known as Shared-Ride

Transportation System (SRTS). This essay will present SRTS in specific area study, Indonesia,

and briefly analyze its socio-economic changes and environmental impacts.

Indonesia is one of the countries in the world with high population density. More than 250 million

people live in Indonesia, mainly in the capital city, Jakarta and other big cities on each island. High

population density tends to cause high mobility and this will also lead to high demand of

transportation, high volume of car or motorcycle on the street (mainly on the rush hour) and high

amount of car ownership. These circumstances may cause traffic congestion and make cities

uncomfortable.

However, society is now greatly facilitated by the presence of transport vehicles nearby with the

easiness for ordering. Wherever and whenever, in real time, people is mobilized anywhere by using

mobile application. SRTS, combining transportation services and technological sophistication of

the Internet, also allows people to know the rate of transport costs (the price transparency can be

seen before ordering), the precise destination (by using Google Maps), and identification of the
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Fikriyatul Falashifah_300408737_2017
Assignment 1 ENVIRONMENTAL MANAGEMENT

driver (regarding to the trust), in which this is a new innovation in the transportation business

world.

SRTS is also a form of sharing economy, the era of sharing goods and services among customers.

In traditional market, money is generally taken by gaining ownership of a product, but sharing

economy shows the advantage of taking value with access-rights to a service (Daunoriene et al.,

2015, p.1), while on SRTS, the captured-value are given to the drivers services to passengers and

companies that linked passengers and drivers through mobile application.

SRTS tries to provide a solution and answers public concern over the public transport services in

Indonesia. Traffic congestion that occurs in several big cities and fear among the people towards

the security of public transport probably have been answered by the presence of SRTS that

provides convenience and comfort for its users. Bicocchi et al (2014, p.1) states that personal

mobility is currently accounted for 26% of carbon dioxide (CO2) emissions, and the presence of

SRTS may reduce the number of personal mobility by providing ride-sharing instead of using

personal vehicles.

Some transportation company applying SRTS in Indonesia are PT GO-JEK Indonesia, Grab Bike

and Uber Taxi. They are emerged by offering their options and varieties in their transportation

services and can be simply downloaded from Apple Store and Google Play. According to CNN

Indonesia (2015, p.1), the amount of current GO-JEK vehicles reach more than 200 thousand and

half of them are centered in Jakarta. Google Play Store (2017) shows that GO-JEK has been

downloaded more than 10 million times. Grab Bike have less vehicles with around 2000 vehicles

on 2015 (TechInAsia, 2015, p.1), but they offer cheaper price than GO-JEK. Uber also tries to
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Fikriyatul Falashifah_300408737_2017
Assignment 1 ENVIRONMENTAL MANAGEMENT

provide an alternative SRTS and has been downloaded 100 million times throughout the world

including Indonesia.

Although the statistics above show success stories, there are some remaining problems that occur

since the emergence of SRTS in Indonesia. Presumably, users are satisfied using SRTS because it

provides a more comfortable, user-friendly and cheaper way to commute. However, in terms of

socio-economic effect, SRTS emergence is often followed by the conflict between SRTS and the

traditional taxi drivers, local governments and competition between SRTS companies itself.

Traditional taxi drivers are undergone decreasing demands of passengers and declining daily

income, and it is frequently led to demonstration by traditional taxi drivers. They attempted to

prosecute SRTS companies, banned their operation and pushed government to declare specific

policies towards SRTS. Local government are challenged by arranging new policies and decide

the tax to SRTS companies in order to create social justice and stabilize the conflict between SRTS

companies and traditional taxi drivers.

Even though SRTS can reduce personal mobility, another environmental problem that still occurs

is the raising amount of SRTS drivers because of the precise income they can get by joining as an

SRTS partner. The revenues division between the driver and the SRTS companies is amounted to

80% for the drivers themselves, and 20% for the company. Even in one day, drivers can earn

bonuses of their revenue once they managed to deliver 10 customers. On average, SRTS drivers

can earn net income at least IDR 3 million per month (Azzahra et al, 2016, p.10). SRTS partner

(drivers) also get health and accident compensation, and gain access to more customers through

application and can operate everywhere for reaching their passengers. This will cause several

cities, in which SRTS companies expanding their business, are becoming more urbanized.
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Assignment 1 ENVIRONMENTAL MANAGEMENT

As the city becoming more urbanized and the SRTS vehicles dominating the street, it may create

traffic congestion and pollution as well. An increasing amount of SRTS vehicles may cause

increasing fuel use and may influence the level of emissions of carbon dioxide, nitrogen oxide,

carbon monoxide and other pollutants (Fellows et al., 2000, p.6). It may also lead to, indirectly,

the diminished quality of street. Firnkorn et al (2011, p.1520) also states that parameter total

distance driven in cars can be converted into energy equivalents like fuel consumption, joule or

kilowatt hour, GHG emission (carbon-released) and air pollution (particulate matters). Therefore,

at the end, the traffic congestion and pollution may cause various health outcomes of people

occupied in several big cities in Indonesia in which SRTS are operated as one type of

transportation.

Several solutions may be applied to face the challenged resulted by SRTS emergence, including

limiting the number of SRTS vehicles, checking the vehicles quality on a regular basis,

determining the tax on SRTS companies, calculating air quality on a regular basis such as using

cost-benefit analysis of air pollution control (Ostro, 1994, p.1), and formulating adaptation and

mitigation strategies towards the changing environmental conditions caused by SRTS, such as

establishing the appropriate medical treatment - if health problems occur - that can be done by

personal or institutional practice such as hospitals. Therefore, SRTS and its socio-economic and

environmental impacts can be well-controlled.

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