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.