Indonesia competition watchdog accuses Grab of offering some drivers special treatment

This article is co-written by Nadine Freischlad.

Grab Indonesia is in a legal battle with the country’s business competition supervisory commission (KPPU).

Photo credit: Grab

The Indonesian branch of ride-hailing platform Grab is accused of favoring drivers who rent cars via Grab-affiliated company Teknologi Pengangkutan Indonesia (TPI).

KPPU alleges that Grab offered drivers under TPI’s car rental schemes preferential treatment, which included tweaking its algorithm to allocate them more rides than other drivers. This raises important questions about the inner workings of Grab’s matchmaking algorithm.

TPI is a car rental company that works with Grab Indonesia to offer several long-term car lease schemes, with the opportunity for Grab drivers to gain ownership of the car after several years. The programs include the Gold Captain, Gold Star, Green Line, and Flexi Plus schemes. TPI’s company website is currently inaccessible.

According to local media outlet Detik Finance, KPPU built its case after it received complaints from independent Grab drivers who are members of the Indonesian specialized transport organization in North Sumatra. They reported being disadvantaged by the unfair distribution of orders between TPI and non-TPI driver partners.

Grab and TPI underwent a third preliminary hearing with KPPU in Jakarta on Tuesday, and the details discussed during this hearing have not yet been made public.

However, KrAsia has obtained material from an individual who attended an orientation program at TPI’s office in 2017 when Grab was actively promoting its rental schemes. Grab had announced its intention to pour US$700 million into its rental program.

During the orientation session, KrAsia’s source received several documents, such as signup forms, and was told that drivers in the Gold Captain rental scheme will get “3x higher ride allocation” than non-TPI drivers, among other benefits.

In return, those who take up the TPI rental scheme have to adhere to various strict rules including receiving a minimum 4.5 customer rating, getting only five order rejections a day, and being available to take orders for at least 50 to 60 hours per week.

A photo provided to KrAsia by the orientation program participant shows the “3x priority order” offer on a banner inside TPI’s office building.

A standing banner advertising the Gold Captain rental scheme / Photo credit: KrAsia’s source

A US$1.7 million fine

Is priority ride allocation fair?