Gojek and Grab drivers check their phones while waiting for customers in Jakarta on April 7. (Photo: JP)Jakarta (VNA) – As SoutheastAsian ride-hailing giants Gojek and Grab are reportedly discussing a mergerdeal, Indonesian officials and experts have warned that a consolidation of suchdominant companies may cause a market monopoly.
Indonesia’s Business CompetitionSupervisory Commission (KPPU) would evaluate any corporate actions based ontheir effect on market concentration and competition post-merger andacquisition, KPPU commissioner Guntur Saragih has said.
Every corporate action can affect themarket structure, especially mergers and acquisitions, he said. If theGrab-Gojek merger were to happen, the commission would need a notification nolater than 30 days after the merger is made effective, he added.
Indonesia’s online transportation marketwas already highly concentrated under the only two major players, said researchassistant Kimberly Tanos at the Institute for the Development of Economics andFinance (Indef). A merger between the two companies will have a potential for amarket monopoly and that is why it is important to have an extensive study ofthis merger possibility by the KPPU, she said.
Kimberly said a merger would benefit thetwo companies as they could share infrastructure, technology and lessenoperational and marketing costs. However, the plan could have an adverse effecton consumers and driver-partners in the form of higher prices and limitationson driver numbers under a new platform.
With less competition, prices forride-hailing services could go up as there would be only one companycontrolling the market, Kimberly said.
Gojek and Grab are the two largest ride-hailingcompanies in Indonesia, which are valued at about 10 billion USD and more than15 billion USD respectively. In 2018, Grab acquired American ride-hailingcompany Uber in Indonesia as the latter left the Southeast Asian market./.
VNA
