Indonesian consumer watchdog disapproves of possible Grab-Gojek merger

Indonesia’s consumer watchdog has expressed disapproval should a merger between ride-hailing giants Gojek and Grab arise.

Tulus Abadi, the chair of daily management at the Indonesian Consumers Foundation (YLKI), told local media outlet Bisnis on Thursday that the merger would enable the resulting company to monopolize the country’s ride-hailing industry.

“The risk of violating consumer rights will be very large because there is no more opportunity to choose. There is only one price and no competition,” he said.

Photo credit: The Low Down

Abadi also urged the Business Competition Supervisory Commission (KPPU) to further its involvement in Grab and Gojek’s discussions to protect the rights of the general public.

In February, The Information reported that Grab and Gojek were in talks about a possible merger. Grab had told some of its investors that its archrival expects at least a 50% stake in the combined entity’s business in Indonesia for its own shareholders, the report said.

However, a Gojek spokesperson told Tech in Asia that the reports weren’t accurate, while Grab declined to comment on the matter.

Citing sources, the Financial Times reported earlier this week that “powerful shareholders” have pushed SoftBank to help bring the merger closer to reality after two years of on-and-off talks between the two companies.

“The forces at play here are higher than simply what Grab or Gojek want – or indeed don’t want. This is about a number of long-term influential shareholders in both companies who want to either stem the losses or find a way to exit their investments,” one Grab investor was quoted as saying in the report.

The Singapore-based unicorn counts companies such as SoftBank, Vertex Ventures, Mitsubishi UFJ Financial Group, and Booking Holdings, among others, as investors. Gojek’s backers, on the other hand, include the likes of Google, Tencent, and Temasek.