Grab fined $2m by Indonesia’s competition watchdog over driver discrimination

A Grab bike rider is seen during rush hour traffic in Jakarta, Indonesia, July 18, 2016. REUTERS/Iqro Rinaldi

The Indonesian operation of ride-hailing decacorn Grab has been fined Rp 30 billion ($2 million) by the country’s Business Competition Supervisory Commission (KPPU), after being deemed guilty of discrimination by giving preferential treatment to a certain group of drivers.

According to the KPPU, Grab Indonesia has given drivers of Teknologi Pengangkutan Indonesia (TPI), a Grab-affiliated company car rental firm, certain privileges at the expense of regular, non-TPI driver-partners.

The ruling also saw TPI being fined Rp 19 billion ($1.3 million), as stated in an official release by the commission.

In one of the case hearings of the trial, which began in October last year, the commission said that Grab’s partnership with TPI aimed to control the tech-based transportation rental market and in effect result in the decreased orders for non-TPI drivers and also reduce the number of such drivers.

The KPPU says its investigation has found “discrimination carried out by GRAB and TPI against  individuals, by giving TPI partners privileges such as giving priority orders, suspension periods, and other facilities.”

“The practice has resulted in monopolistic practices and unfair business competition against non-TPI partners and individual partners,” the statement said.

Responding to the verdict, Grab said in an official statement that its partnership with PT TPI is established with the simple goal of benefiting all its driver-partners through the ease of access to vehicles and that it has not violated any regulation, engaged in any anti-competitive business practices, or injured any third parties.

The company also maintains that the booking system is fair and purely based on performance and merit and that there is no preferential treatment given to driver-partners who are registered with TPI.

“With this matter of principle in mind, we will appeal against KPPU’s decision in due course according to prevailing regulation,” a Grab spokesperson said.

Indonesia is not the only market where Grab has been facing legal troubles related to matters of competition.

In Malaysia, the country’s competition commission 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. The regulator has accused Grab of its dominant position in the market by preventing its drivers from promoting and supplying advertising services for competitors.

Grab, however, has challenged the proposed fine in court.

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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.