Service Dominant Logic and Value Co-creation in Public Transport Service Development at Samarinda

As defined by Vargo and Lusch (2004, 2008) in Enquist and Erikkson (2009), G-D Logic is essentially related to the ‘neoclassical’ preoccupation with units of output and operand resources. S-D Logic on the other hand is essentially related to a new logic which is more related to service provision with units of value creation and operant resources. Gebauer, Enquist and Johnson et al. (2009) argued that “Applying increasingly the service-dominant logic has led to superior success in performance measures of the public transport system.”

The government of Samarinda is developing new transportation modes using river as a transportation channel. Samarinda is a city traversed by the Mahakam River which already connecting Samarinda with the the rural cities in East Kalimantan Province. As for transportation in the city, nowadays using only land routes to transport using the public transportation system, while there are rivers that are adequate and strategically located because it divides the city into two parts, therefore the development of transportation modes that will be done now is very suitable both for environment as well as for improvements in services to residents. In developing modes of transportation be it new or improving existing ones, things that must be considered by the government is how the transport service could touch all citizens without exception and can provide continuous service, which must meet the five stages in service innovation (Nidumolu, Prahaland and Rangaswami, 2009):

1. 
   
2. Compliance as opportunity. Compliance can be seen as an opportunity for innovative public transport services in Samarinda, as an example of community needs would be feasible and affordable transportation that will develop new innovations that seek to improve service.
   
3. Making value network sustainable. Value network creates value by facilitating a network relationship between the organization and customers, using a modeling technology (Stabell and Fjeldstad, 1998). Service dominant logic and customer perspective can be used as the basis for configuration values in the context of public transport in Samarinda.
   
4. Designing sustainable services. Public transport is a natural part of travel in a sustainable society has to be built upon shared values and shared meanings (Edvarsson and Enquist, 2002). Development of new modes of transportation in Samarinda have to think about sustainable services, should mean a lot of rethinking how services received the same and equal society for all, regardless of income level let alone a social level.
   
5. Thinking differently by developing a new business that include economic, environmental and social perspectives. FP6 said that all social and economic actors are resource integrators (Vargo and Lusch, 2008 in Enquist 2009). Development of new modes of transportation in Samarinda must also think in terms of economics for public transport services that are not too burdensome government financial but also can be affordable by all levels of society. In terms of environment, development of river transportation modes will increase the benefits of the river and also improve the cleanliness of the river without having to build new construction on land. In social view, the development of river transport will help communities and improve the attractiveness of Samarinda as one means of tourism. In this view, value creation can be carried out jointly between government, communities and service providers, so as to create value creation opportunities (Enquist, 2009).
   
6. Creating next practice platform. Integrated public transport is the platform that must be carried out subsequently by the government of Samarinda, integrating between land and river transportation will improve the public service, so that Service Dominant Logic actually are applied in the development of urban transportation modes in Samarinda. Customer experience starts with an integrated public and individual transport network (Enquist, 2009).
   

Service Dominant Logic which was originally developed only in the private sector now increasingly influential in the public sector, although not in order to increase profits. In public sector service dominant logic concept can be applied in conjunction with service sustainability. Value creation in sustainable public transport is built on shared service/sustainability culture that is based on shared basic values (Enquist et al, 2006).

Understanding, empathy and awareness are the basis of interaction between customers and service provider in this case the Government in value co-creation in the public service, especially transportation. Application of the five stages in service innovation for the development of new modes of transportation in Samarinda can produce better service improvement and sustainable service. Value co- creation between community and the government is one form of effective Corporate Social Responsibility.