Grab locked in legal battle with Indonesian competition watchdog over alleged driver discrimination

FILE PHOTO: A man walks past a Grab office in Singapore March 26, 2018. REUTERS/Edgar Su/File Photo

The Indonesian arm of Southeast Asian ride-hailing major Grab has found itself locked in a legal battle with the local competition watchdog over allegations of driver discrimination.

According to the Business Competition Supervisory Commission (KPPU), Grab Indonesia has given drivers of Teknologi Pengangkutan Indonesia (TPI), a Grab-affiliated company car rental firm, preferential treatment, including priority orders from customers at the expense of regular, non-TPI driver-partners.

Other special privileges for TPI drivers, who take up long-term car lease schemes arranged by Grab Indonesia, include exclusive training and family insurance offers for drivers.

In a recent report, KrAsia said that TPI drivers had been told in an orientation session that its “Gold Captain” rental scheme will get “three times higher ride allocation” than non-TPI drivers, among other benefits.

The KPPU says that such a deal is a violation of the 1999 Antitrust Law on discriminative policies and unfair competition, which warns against business practices that cause “unhealthy business competition in the form carrying out acts of discrimination against certain business players.”

The case is now in court with Grab and TPI undergoing a third preliminary hearing last week in Jakarta. While details of the hearing were not made public, Grab legal representative and celebrity lawyer Hotman Paris Hutapea told local reporters afterwards that Grab and TPI had not broken any laws.

“It’s a pity that, just because one company has a deal with another, between one that owns cars and another with an application, it is considered a violation,” Hutapea said.

He went on to make reference to ride-hailing rival Gojek, which works in partnership with a local taxi operator.

“Different companies like Gojek and Blue Bird also share an application. So what law have we broken?” he said.

Speaking to KrAsia, the KPPU warned that Grab could be slapped with a maximum fine of IDR 25 billion (USD 1.7 million) if proven guilty.

Responding to our query on the matter, Grab Indonesia said that its “booking system is fair and purely based on performance and merit.” It admits to offering special benefits programs, which include prioritised booking, but only to eligible driver-partners who have consistently been rated highly by passengers.

“There is no preferential treatment given to driver-partners who are registered with TPI. If Grab driver-partners registered with TPI consistently provide quality service to passengers, naturally they are entitled to the same benefits programmes as all other driver-partners,” the company said.

The development in Indonesia comes as SoftBank-backed Grab is facing a likely penalty from the competition regulator in neighbouring Malaysia over a long-standing case of alleged monopoly.

The Malaysia Competition Commission (MyCC) earlier this month proposed a fine of over 86 million ringgit ($20.5 million) on Grab for violating the competition law by imposing restrictive clauses on its drivers, according to a statement by the regulator. The regulator said that Grab had abused its dominant position in the market by preventing its drivers from promoting and supplying advertising services for competitors.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.