Go-Jek’s entry into the Philippine market got rejected for the second time by the Land Transportation Franchising and Regulatory Board (LTFRB), a hurdle on its expansion plan in Southeast Asia, Rappler reported.
Similar to the previous rejection, LTFRB turned down Go-Jek’s application to operate in the local market saying that it still fails to meet requirements on foreign ownership.
“Go-Jek is disappointed with the LTFRB’s decision to deny our motion for reconsideration and our offer to address Filipino commuters’ urgent need for more transportation options,” a Go-Jek spokesman told KrASIA.
“Commuters in Singapore, Vietnam, and Thailand, as well as Indonesia, benefit from our technology every day, but due to this decision, it seems drivers and commuters in the Philippines will have to wait a bit longer. We will now explore our options,” he said.
Go-Jek further stresses the need for healthy competition to provide options for commuters and drivers in the Philippines.
Ride-hailing services in the Philippines need to have at least 60% Filipino ownership. Back in January, Go-Jek’s first application made through its subsidiary Velox Technology Philippines was rejected because it is reportedly 99.99% owned by its Singaporean parent company, Velox South-East Asia Holdings. It’s unclear whether any changes were made to the company ownership setup in Go-Jek’s second attempt to get the regulator’s green light. In any case, the LTFRB decided that foreign ownership rules were not met. According to Rappler, Go-Jek has been exploring a possible M&A deal with the Ayala Group, a Filipino conglomerate.
Go-Jek’s biggest rival in the region, Grab is already operating in the Philippine market. For now, this means Grab remains the dominant player in the country, with 49,000 active drivers as of February 2019. Meanwhile, other local firms such as MiCab, Hirna, Hype, Owto, GoLag, ePickMeUp, Snappy Cab, and Ryd Global are still relatively small.
Editor: Nadine Freischlad
