Rumors of a merger between Grab and Gojek, Southeast Asia’s “two-top” ride hailing platforms raised concerns over a market monopoly.
According to Bloomberg, rumors of a merger between Grab and Gojek have risen rapidly since early this month.
The two companies originally started with car and motorcycle ride sharing services. And now both have expanded their businesses to enable various services with one app. It ranges from food delivery, delivery, to online shopping.
Grab, based in Singapore, started its business in 2012 and stood as the No. 1 player in Southeast Asia. Especially when it acquired the Southeast Asian business of Uber in March 2018.
Gojek started in Indonesia in 2010. Then it advanced to neighboring countries such as Vietnam, Philippines, Thailand, and Singapore. Currently it has grown into Indonesia’s first Decacorn company due to the influx of investment.
Decacorn refers to an unlisted venture with a corporate value of more than $10 billion.
“Grab and Gojek have narrowed their differences to merge,” said two company officials, who spoke on condition of anonymity. Reporterdly, Softbank Group Chairman Masayoshi Son who is a major investor in Grab participated in the talk. Along with high-ranking officials from both companies.
Officials said CEO Anthony Tan Grab will lead the entire organization after the merger. And that Gojek executives will continue to lead the business under the Gojek brand in Indonesia. Ultimately, they aim to become a listed company, Bloomberg reported.
The value of Grab is at more than $14 billion, while that of Gojek at more than $10 billion
Grab and Gojek did not officially comment on the merger rumor, but neither did they deny it.
Users have benefited from the two companies’ fierce competition to attract customers. The two companies also gave discounts on car use and delivery food orders, provided coupons. And both worked hard to manage the quality of service for drivers.
For this reason, there are concerns that the merger of Grab and Gojek will monopolize the market and harm users.
The merger between the two companies is beneficial to the company by reducing infrastructure, technology, operation and marketing costs, but observers say it could become more expensive and disadvantageous to drivers.
Indonesia’s Competition Supervision Committee (KPPU) said, “All companies’ choices can affect the market structure, especially mergers and acquisitions,” adding, “We are closely watching rumors of a merger between Grab and Gojek.”
Indonesia’s app-based motorcycle drivers’ association, Ojol, said it opposes the merger and said it would not hesitate to stage massive protests.