Wed, 24 Jun 2015

Renting vehicles is common practice in Indonesia’s holiday destinations like Bali, where sightseeing is a main draw and mobility is necessary. However, one doesn’t often hear of folks renting cars in megacities like Jakarta, as most of the time they just hop into one of the many taxis swarming the streets. It could also be due to the fact that the chaotic streets are intimidating, and navigating the city is a daunting task if you’re fresh off the plane. However, with more regional commuters traveling back and forth to Jakarta, it seems likely that a healthy demand for car rentals in Indonesia is there.

Lepaskunci (which translates to “off key”) is an online marketplace for renting vehicles and chauffer services in the archipelago. It’s different from traditional car rental services like Hertz or Avis because anyone who comes to the site can put their vehicle and service up for grabs. According to Lepaskunci founder Suhartanto Raharjo, the site is meant for both average citizens to generate income from idle vehicles, as well as to provide new business opportunities to drivers. Somewhere between Uber and Avis

Those savvy about ridesharing apps like Uber and GrabTaxi might wonder what the unique value proposition is for Lepaskunci. The model differs from ridesharing apps because it’s not an on-demand service. Instead, users select and drive the cars themselves. The site offers users the option to browse by city and vehicle preference.

Users can also choose whether they want a personal driver – with both male and female options available. Lepaskunci users can also specify the duration of time for their rentals.

According to Raharjo, drivers who want to rent out their cars and services through Lepaskunci must undergo a screening process. They must prove that they are the real owner of the vehicle, provide original documents, and submit a matching driver’s license. They must also prove that the car is insured. Those who sign up as drivers must submit their licenses and undergo a background check, says Raharjo.

While it’s unclear what steps Lepaskunci takes to ensure drivers pass its background check, the issue of user safety in transportation startups is a sensitive topic across Asia. Incidents of assault have been reported in places like India, and last week, a woman was raped by a driver while using one of China’s private-car apps in Guangzhou.

Last week in Jakarta, five Uber drivers were arrested because the local government decided the company is running an illegal service and operating without the proper permits.

Jumping the gun and ironing out kinks

The idea of a car rental and chauffeur service marketplace in Indonesia is interesting, as it helps solve traffic and navigation problems for newcomers and those who don’t want to buy their own cars. However, there are still a lot of risks to consider, namely what would happen in the case of an accident. Just because a car is insured in Indonesia doesn’t mean that the person driving the vehicle is not liable for damage done in the event of a collision – and not to mention damage to other vehicles. The list of legal question marks goes on.

Lepaskunci is still in an early phase of development. Because of this, the site is not yet set up so that folks can directly start clicking to make bookings, although Raharjo says it will be soon. Instead, at the moment, Lepaskunci is merely listing cars and drivers, along with pictures and contact information, then letting users connect on their own. Essentially, this means that Lepaskunci is allowing itself to be disintermediated, which critics could argue is not a sound strategy.

Raharjo assures Tech in Asia, however, that a direct booking feature will indeed be an integral part of the business model, along with an escrow service for payments. Raharjo says Lepaskunci aims to collect a 10 percent commission from each car rental processed through its site. 10 percent seems like an awfully steep figure, especially for an early stage startup that’s looking to grow its user base. However, as Lepaskunci is a brand new firm that just launched on June 12, it’s likely that the startup will make some swift adjustments to achieve product-market fit.

In Indonesia, Lepaskunci will compete with traditional car rental services, but also similar local startups like Drive, another car rental marketplace that lets users order directly from its platform. Jakarta-based Tiket also offers a similar service.

Following the launch, Raharjo says the site currently has around 100 registered users, with about 50 cars available. The main goal of Lepaskunci is to increase its inventory of vehicles, drivers, and overall offerings in its first phase. In the future, the firm aims to cooperate with car rental insurance companies to smooth out legality problems. It’s also looking to release a mobile app.

Editing by Osman Husain and Steven Millward; lead image by Muhammad Rasyid Prabowo.