As Go-Jek’s PH plan hits regulatory roadblock, Rudiantara offers to mediate

Go-Jek
Go-Jek motorcycle drivers in Jakarta. Photographer: Dimas Ardian/Bloomberg

The regulatory setbacks Go-Jek has faced in its efforts to enter the Philippine market have elicited an offer of help from Indonesia’s Communication and Information Minister Rudiantara.

The minister said he will establish negotiations with his Philippine counterpart to ease Go-Jek’s entry into the market by offering, in return, to open the door for Philippine proptech unicorn Revolution Precrafted to launch its operations in Indonesia.

“There is only one condition – allow Go-Jek to be in Manila, Philippines,” he said, as quoted by local media Katadata.

The Philippine transport regulator, Land Transportation Franchising and Regulatory Board (LTFRB), has denied Go-Jek’s application to launch ride-hailing services in the country over foreign ownership issues.

According to The Rappler, The LTFRB issued a resolution dated December 20, 2018, denying the application made by Go-Jek’s local subsidiary Velox Technology Philippines as a transport network company (TNC).

LTFRB chairman Martin Delgra told Reuters on Wednesday that Velox “did not meet the citizenship requirement and the application was not verified in accordance with our rules”. Velox is majority owned by Go-Jek while Philippine regulations mandate at least 60 per cent local ownership.

“We continue to engage positively with the LTFRB and other government agencies, as we seek to provide a much needed transport solution for the people of the Philippines,” Go-Jek said in a statement to DEALSTREETASIA.

Prior to this, Go-Jek’s application had been put on hold for several months by the regulator due to a moratorium which was signed days before Go-Jek filed its application on August 13.

The memorandum barred the government from accepting new applications for transport companies that intend to operate in the country. The move, the board said, was part of an effort to closely monitor the existing licensed companies and identify those that required license renewal or evaluation.

Go-Jek is seeking to make the Philippines its fourth overseas market, after Vietnam, Singapore and Thailand.

The company’s operations in Vietnam, which kickstarted in September last year, is carried out under the local brand Go-Viet. Similarly in Thailand, where it recently launched its beta app, Go-Jek operates through its local affiliate GET WIN.

For Singapore, however, Go-Jek employed a different approach by using its own entity and brand, without the use of a local affiliate.

Go-Jek is reportedly finalising a $2-billion funding round to boost its international expansion plans.

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