Tech's Global Challenge Plays Out in a Jakarta School Yard

(Bloomberg) -- Uber Technologies Inc. has spent millions of dollars fighting politicians and business lobbies trying to scuttle the app everywhere from New York to London. For Indonesian ride-hailing and food-delivery startup Go-Jek, the push back is coming from the lunch ladies at Jakarta Intercultural School.

The school banned Indonesia’s first billion-dollar tech startup from delivering takeout lunches to its 2,400 students in August after dozens of drivers in Go-Jek’s signature green and black jackets began bombarding the high school during lunchtime and diverting revenue from the cafeteria, run by food giant Sodexo SA.

The school’s main gripe: Delivery meals create unwanted waste and are high in sugar and salt, says school spokeswoman Dyah Lestarina. Sodexo says it agrees with the school’s decisions.

Students miffed about returning to cafeteria grub took to the school newspaper to make the case that they should decide what to eat -- not the school. They argued for options beyond Sodexo and The Booster Hut, a parent-run bistro and bookstore whose proceeds benefit varsity sports teams.

"The Go-Jek ban is unjustified," Nicky Hancock, from the class of 2019, was quoted saying, explaining some students don’t feel like the "Sodexo and Booster Hut foods fit their needs."

The student uproar is just a small example of a bigger wave of protests unfolding around the globe as tech startups threaten big, established players.

London revoked Uber’s license to operate ride-hailing services in September, which the ride-hailing app is appealing. Berlin cracked down on short-term apartment rentals like those through Airbnb last year. China recently outlawed new online micro-lenders.

What began with Uber undercutting traditional taxi companies that obtained expensive licenses and saw themselves as playing by the rules, has spread to hotels, restaurants, banks and other industries hit by an expanding suite of on-demand services.

JIS’s Lestarina says the decision remains firmly in place, noting the delivery ban applies to all food delivery to students during school hours and isn’t restricted to Go-Jek.

Go-Jek, which has 600,000 drivers and 100,000 merchants, has already expanded to 17 different types of services as varied as house cleaning, doctor visits, massages and hijab styling, part of its suite of "Go-Glam" offerings. The company claims to be the biggest food delivery service in the world, outside China.

"We haven’t been a ride-hailing app for a long time, we are a bigger platform," says Go-Jek CEO Nadiem Makarim.

Backed by heavyweights including private equity firm KKR & Co. LP and Chinese internet giant Tencent Holdings Ltd., the company is valued at $1.8 billion, according to CB Insights. Last week, the CEO told Bloomberg News he intends to pursue an initial public offering.

Startups like Go-Jek are pouncing on the strong network effects that come with building a massive, loyal customer base, according to venture capitalist Phil Chen.

"Once you have the customers, you can go into any industry," says Chen, an adviser for Hong-Kong based Horizons Ventures Ltd. "Like Amazon became the Everything Store, Go-Jek will become the every service app."

Go-Jek spent years battling Indonesia’s motorbike and taxi industry. It successfully fought alongside Uber and Grab to overturn a government ban on using private vehicles for public transport and quelled violent protests by taxi drivers who brought traffic in Jakarta to a screeching halt.

In January, Go-Jek forged the ultimate truce: An alliance with PT Blue Bird Group, Indonesia’s largest taxi operator with more than 20,000 drivers. Go-Jek now lets users order Blue Bird cars right from the Go-Jek app.

While the ride-hailing giant declined to comment specifically on the Jakarta Intercultural School’s ban, a spokeswoman said the company "always believes in collaboration."

--With assistance from Yoolim Lee

To contact the reporter on this story: Shelly Banjo in Hong Kong at sbanjo@bloomberg.net.

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Robert Fenner

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