Grab, partner face $3m fine in Indonesia for unfair driver treatment

Grab Indonesia and its partner have been fined a total of over US$3 million by the country’s competition watchdog, which deemed the ride-hailing major guilty of demonstrating preferential treatment to some of its driver-partners.

Photo credit: Grab

The company gave a favorable allotment of priority orders to drivers of Teknologi Pengangkutan Indonesia (TPI), its affiliate car-rental firm, according to the Business Competition Supervisory Commission (KPPU).

The agency ruled that this practice has resulted in “monopolistic practices and unfair business competition” for Grab Indonesia’s individual driver-partners and non-TPI drivers.

In a case hearing for the trial, KPPU considered that the agreement between Grab and TPI was aimed at controlling the country’s tech-based ride-hailing market, which resulted in a decline in orders for non-TPI drivers.

As a result, the agency imposed fines of 30 billion rupiah (US$2 million) for Grab Indonesia and 19 billion rupiah (US$1.3 million) for TPI.

However, Grab believes it didn’t violate regulations.

“Grab’s partnership with PT TPI is established with the simple goal of benefiting all our driver-partners through ease of access to vehicles,” a Grab Indonesia spokesperson told Tech in Asia. “Second, we have always believed in providing equal economic opportunities for all our driver-partners. Our booking system is fair and purely based on performance and merit, as Grab aims to maintain a positive and respectful user environment for everyone.”

The ride-hailer emphasized that no preferential treatment is given to driver-partners who are registered with TPI. “Grab driver-partners registered with TPI consistently provide quality service to passengers. They would be equally entitled to the same benefit programmes as all other driver-partners who are registered with other fleet companies,” the company said.

KPPU’s decision comes as Grab as a whole anticipates “a long recovery period” and a prolonged economic recession due to Covid-19.

In late 2019, the company also landed in hot water in Malaysia for allegedly abusing its dominant position in the country. The Malaysia Competition Commission fined the Singapore-based company US$20.9 million for preventing its drivers from “promoting and providing advertising services for its competitors.”

Grab repeatedly said it has fully complied with local laws and requested for a review on the decision, but the agency dismissed the proposal earlier this year.