Smoother Ride

10 months ago . 6 min read
MP
Marella Putri
Writer at Forbes Indonesia
Smoother Ride
Setia N. Milatia Moemin, president director of Perum DAMRI. Photograph by Ully Zoelkarnain for Forbes Indonesia

Buses remain the favorite mode of public transportation in Indonesia. According to Statistics Indonesia (BPS), more than 16% out of 303.4 million domestic trips in 2018 were made using buses, second only to private transportation (67%). This figure also gradually increased thanks to relatively improving economic conditions and easier accessibility to tourist destinations in Indonesia, as the government has begun to develop infrastructure and better public transportation services.

Among the many bus companies in Indonesia, one of the better known is state-owned public transit bus company Perusahaan Umum Djawatan Angkoetan Motor Repoeblik Indonesia (Perum DAMRI). Among the oldest in the country, the roots of DAMRI date back to the Japanese colonial era and its status was changed to a Perum in 1984. However, it is only in the last couple years that the 74-year old company has undergone a real transformation—having its culture, systems and services rejuvenated—but the process has not been easy.

“The [new digital] system is doing well, but [changing] culture is hard. It isn’t something that you can change overnight,” says president director of DAMRI, Setia N. Milatia Moemin, who received her appointment at the end of 2017, and began leading the company in 2018. Tia, as she is usually called, has a long career in the transportation field. Her previous experience includes special expert staff to the chairman of Badan Pengelola Transportasi Jabodetabek, country director at the Institute of Transportation Development and Policy, and team advisor for the director general of land Transportation.

Tia recalls the number of challenges she encountered at DAMRI upon arrival, especially how different DAMRI was compared with her previous companies. The work culture and human resources lacked discipline, there were too many layers of bureaucracy, and there was no digitalization at all—everything was still done manually despite the high number of transactions that DAMRI was handling across all its fleets. Tickets for example, were still being sold conventionally at the bus station using only paper torn in half, allowing unaccounted sales and false ticket distribution to thrive and inflict losses on the company.

Concerned about these untoward practices, Tia started her first months at DAMRI by building a digital system for the company. Implementation began in the third quarter of the year, starting with an eticketing and finance system. The company took more steps to rejuvenate its buses, add more services, fix the inventory system—and the new system has proved its efficiency and mitigated the company’s losses. DAMRI saw its net income soar to Rp 21.56 billion at the end of 2018, up by more than 200% from 2017. In 2019, this figure increased by another 100.6% to Rp 43.26 billion. DAMRI then began setting up GPS tracking on buses and drivers, so their location could be monitored on the company dashboard, including real-time company transactions and revenue based on each bus route across Indonesia. Last December, the company also launched its own DAMRI app for customers to easily access bus information and to order tickets.

DAMRI Performance in 2019. Source: DAMRI

Although there have been many good outcomes, the new digital system is still facing resistance from internal parties who cannot accept their comfort zones being disrupted, causing friction and disquiet within the company. Tia says that handling this resistance remains the company’s hardest challenge, and that it will take time.

Last year, DAMRI had 2,199 operational buses serving 34 million customers. The company’s areas of operation include airport connectivity, intercity interprovince (AKAP), city and transboundary transit, logistics, travel/tourism, and pioneer transportation. The first two are the largest revenue contributors, respectively 32% dan 25%.

However, Tia says that since 2019, the number of customers for the airport connection has decreased as a result of higher airfares. At Soekarno-Hatta International Airport for example, DAMRI used to serve more than 27,000 customers on its daily average, but lately this has dropped to fewer than 20,000. On the other hand, the number of customers for AKAP transportation has increased by 15%, particularly since toll roads, such as the trans-Java toll road, have been opened, these are often easier and cheaper than using airlines.

DAMRI’s new branding and refreshed appearance is also attracting more younger customers, who according to Tia make up half of DAMRI’s customers today. The company is adapting to modern ways to approach new customers, such as through social media and events.

“We need not only to regenerate our buses, but also our customers. Now DAMRI also serves tourism purposes, the interest in which comes mostly from the younger generation, millennials [...] That’s why we are approaching them,” says Tia. In addition, people nowadays put more value on comfort, which she says can be seen in DAMRI’s AKAP royal and executive buses accounting for 60-70% of the AKAP services.

What differentiates DAMRI from other bus companies is DAMRI’s pioneer (Perintis) transportation segment, which actually accounts for 54% of DAMRI’s routes. It is often the only service in the country for customers in the frontier, outermost, and least developed (3T) regions—such as in Maluku and Papua. As a result of poor infrastructure and connectivity in the 3T regions, DAMRI is often the only means of transportation to cross mountainous paths and rivers, where roads and bridges are few and far between, to go to school and for people to sell their products in nearby towns.

“We are running commercial buses to make a profit, and at the same time we are also the government’s agent of development through our pioneer transportation service. The government allocates public service obligation funds, since we are assigned to help with the government’s responsibility. However, usually it can’t possibly cover everything, because we need to frequently change tires for example, so we cross-subsidize from our commercial transportation revenue,” explains Tia, emphasizing DAMRI’s necessity to keep improving.

While many changes have been made, DAMRI still has a lot of plans this year. The company will officially launch its own carrosserie under strategic business units, which have already shown good results in trials, and will serve all DAMRI buses in the future. It is also working with the tourism sector to develop more routes in the 10 National Tourism Strategic Areas, and it aims to increase its profits by 150% by the end of the year.

In the long term, Tia wants to make DAMRI an international- standard transportation company, that supports Indonesia’s tourism vision and serves both Indonesians and tourists alike, from big cities to remote areas.

“International standards don’t only apply to hotels, but also transportation. If tourists have a good first impression of our public transportation, hopefully they will come back again [...] As a provider I want to see my customers happy. Although it is easier said than done, the management is challenging. From the organization, human resources, work culture, system—everything needs to be transformed,” says Tia


MP
Written By
Marella Putri
Writer at Forbes Indonesia
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