Indonesian passenger transportation company Go-Jek is considering entering the passenger transportation industry within the Philippines. GoJek was founded in 2010 and has grown to offer 18 different services. It desires to offer transportation network vehicle services (TNVS) and has already spoken to representatives from the Land Transportation Franchising and Regulatory Board (LTFRB).
Competition is a serious concern for transportation network firms (TNKs) operating within the Philippines. Much attention was paid to the sale, which saw Grab acquire operations of its longtime rival Uber in Southeast Asia. The Philippine Competition Commission (PCC) launched an investigation and it was even reported that Grab would receive 93 percent of the Philippine market share.
“GoJek is interested in entering and providing TNVS (Transportation Network Vehicle Service). it’s just one of 18 services they offer,” LTFRB board member Aileen Lizada told reporters on Monday this week.
“GoJek is big; we have to study well because we have to protect local players,” she added, noting that the corporate desired to open a store offering taxi services in all cities within the Philippines.
Grab Philippines currently dominates the local passenger transportation industry after its parent company purchased Uber’s Southeast Asian operations. To increase competition, LTFRB has accredited smaller players resembling Micab, Hirna, Hype, LagGo and Owto.
Lizada stated that Indonesia doesn’t regulate shipping firms and noted that GoJek charges much higher prices.
“In Indonesia, Go Jek can increase as much as five times. I told them dito (here) only twice. Then I asked them, will you survive? They said they’d to review [this]” she added.
The LTFRB ordered Grab Philippines to lower its growth rate from a maximum of two.0x to 1.5x because it completes its acquisition of Uber.
As ride-hailing services have develop into essential to Southeast Asia’s infrastructure, the explosive growth of now-dominant player Grab has shaken up the industry within the region. With the exit of US-based Uber Technologies, competition on this field is entering a brand new dimension.
In March, Grab announced it might take over former rival Uber’s operations in eight Southeast Asian markets where it previously competed.
In the region’s largest market, Indonesia, rival Go-Jek has grown in popularity since launching its own app in 2015. Go-Jek’s market share is estimated to be greater than Grab’s, and it’s the primary unicorn bred in Indonesia, and Google belongs to its investors.
Grab, which began as a taxi booking app provider in Malaysia in 2012, now operates in nearly 200 cities across eight Southeast Asian countries. Uber arrived within the region in 2013, and growth of each services has skyrocketed, thanks partially to a growing range of transportation options, including taxis, private cars and motorcycles, that may get through the traffic jams that plague many Southeast Asian cities.
According to the American research company Frost & Sullivan, in 2016, passenger transport services were used a complete of 6.1 billion times within the six primary countries of Southeast Asia. The company estimates the market size at $20.4 billion and is anticipated to grow 6.5% annually through 2021.
A recent survey conducted by Assumption University of Thailand found that 89% of respondents found such services convenient and convenient. Similarly, almost 80% of Indonesians recently surveyed by Universitas Indonesia said they’d be unsure what to do without local market leader Go-Jek.
Such positive market penetration has attracted investments from large international firms resembling SoftBank Group, Honda engines AND Hyundai engine, all of which provided financing to Grab. The American research company CB Insights estimates Grab’s valuation at $6 billion and is certainly one of the few “unicorns” in Southeast Asia – private firms value at the very least $1 billion.
However, rivals to Grab’s dominance in markets apart from Indonesia are already emerging. Japanese chat application provider Line introduced a taxi booking service in Thailand, while start-up MyCar launched operations in Malaysia in April.
Competition extends beyond passenger transportation services as firms expand into many other areas in an effort to draw more customers and drivers. Many of those services usually are not typically available in developed Western markets and represent an evolution of regional motorcycle taxis beyond easy passenger transportation.
On a recent lunchtime in Bangkok’s business district, a GrabFood driver was instructed via the Grab app to deliver three orders of pork and rice. The driver paid for the meals himself before delivering them on the scooter to the agreed place. There, he received a refund for his purchase and a further 100 baht ($3.20) for delivery from Grab.
In Indonesia, Go-Jek Food also offers food delivery, which is certainly one of the wide selection of services it provides. Customers can order house cleansing, automobile repairs and even massages. CEO Nadiem Makarim describes such services as “a game changer.”
The next battleground between these firms could also be funds. A big proportion of Southeast Asia’s population doesn’t have access to banking services, and paying in money when making purchases stays the norm. Just over 30% of Filipinos and Indonesians have bank accounts.
According to forecasts by Capgemini and BNP Paribas, cashless payments in emerging Asian markets are expected to grow by a median of over 30% annually by 2020. In Indonesia, the worth of e-money transactions increased by 130% between 2015 and 2017.
Such development encourages not only banks to have interaction in payment activities, but in addition retailers, telecommunications firms and railway operators.
Grab has 2.4 million drivers across Southeast Asia, and Go-Jek has 1 million in Indonesia. About 84,000 passenger cars alone, not counting the ever present motorcycle taxis, are registered with passenger transport services in Indonesia, outnumbering the 62,000 taxis. In 2017, the country’s largest taxi operator, Blue Bird Group, recorded an over 10% decline in revenues and net profit.
