Behind the Digital Boom: Proprietary Market and Platform Capitalism Expansion in Indonesia

The worldwide spread of platform capitalism has revealed a pattern of hypergrowth and hyper-concentration of markets. Within digital platform environments, markets grow quickly as millions of users interact and exchange goods or services. These markets, simultaneously, are highly concentrated by only handful platforms. From Silicon Valley's Big Tech dominating globally to domestic start-ups championing local markets, different players tend to follow a similar "winner-take-all" scenario. Existing explanations emphasize the role of algorithmic technologies, network effects, venture capital, and gig labor in driving platform market dominance. Yet, these views assume markets as a given arena where platform firms enter. How the markets are transformed under platform capitalism and why the transformation results in rapid growth alongside extreme concentration thus remain underexplored. 

This dissertation, by contrast, sees platform firms not just as new players in existing markets but architects of new markets. It proposes a concept of "proprietary market" to capture the changing nature of market under platform capitalism as social arena of exchanges organized within a proprietary digital ecosystem, characterized by platforms' ownership/control over data, infrastructure, and networks that shape the terms of interactions among market participants. Proprietary control over these means of connection allows platform firms to centralize and capitalize on flows of goods, services, and information within a privately controlled digital environment. This conceptual framework, I argue, helps illuminate mechanisms of capital expansion under platforms' rentier logic oriented toward scalability and scarcity. To sustain accumulation, platform owners must scale up exchange relations within their internal proprietary markets which, in turn, enables them to consolidate external broader markets where they operate. I aim to demonstrate the analytical utility of proprietary market concept through in-depth case studies of Gojek and Grab in Indonesia. 

The empirical chapters show that these companies have spearheaded and concentrated on-demand platform industry in Indonesia by creating a new social order of proprietary market that resolve valuation, competition, and cooperation problems among platform participants through three mechanisms. First, Gojek and Grab define their values by employing both narratives and numerical devices to capture market data from users' interactions and capitalize them as rent-bearing assets for platform and their investors. Second, they arrange competition landscape inside and outside their ecosystems by owning digital market infrastructure and taking advantages of gig drivers' mobilization and partnering with government institutions to shape rounds of regulatory changes toward legitimacy and acceptance for their business. Third, these firms enforce cooperation from drivers through private governance structure combining both algorithm and social networks to discipline them while maintaining their dependency on platforms to reach consumers. The findings reveal that proprietary market is not simply a byproduct of technology or business strategy but the result of the platforms' politics involving investors, consumers, producers, and governments. 

This study bridges insights from political economy and economic sociology to enrich digital platform studies. Seeing platform capitalism beyond the conventional view of markets, it shows how platforms establish a new order of market as a rent structure. The argument shifts the focus from global digitalization and financialization to local politics of market reorganization. Situating platform capitalism in the Global South context, it reveals how platforms deploy new resources in their political appropriation of old social structures to centralize markets and consolidate power. The conclusion challenges the view of platforms as benign growth engine, showing that their expansion exacerbates labor exploitation and inequality.