Malaysia OKs Gojek’s entry, ride-hailing firms says talks still on

Gojek and Dego Ride will start operating based on a proof-of-concept basis to measure demand for the service over six months, Loke said. — Reuters

KUALA LUMPUR: Malaysia will allow motorcycle-hailing firms such as Indonesia's Gojek to start limited operations from January, a minister said on Nov 5, which could help end Grab's near-monopoly in Malaysia's broader ride-hailing market.

Gojek – whose investors include Alphabet's Google and Chinese tech companies Tencent and – told Reuters its Malaysia entry had yet to be finalised.

"We will now reach out to the ministry to understand the framework and to work through the detail of how we might approach a launch (in) Malaysia," a Gojek spokesman said.

"Ultimately, we want to support governments as they develop the digital economy in ways that are inclusive, foster innovation and drive competition."

Malaysia's ride-hailing segment is expected to earn revenue of US$558mil (RM2.30bil) this year, growing at about 16% annually to hit US$1bil (RM4.13bil) by 2023, according to German database company Statista.

At 12.7%, ride-hailing user-penetration in Malaysia, South-East Asia's third-biggest economy with 32 million people, is nearly double that of the region overall.

Malaysian Transport Minister Anthony Loke Siew Fook told parliament firms such as Gojek and local startup Dego Ride would be able to start operating based on a proof-of-concept basis, to measure demand for the service over six months.

"Bike-hailing will be an important component in providing a comprehensive public transport system, as a mode for first- and last-mile connectivity," Loke said.

The pilot project would be initially limited to the Klang Valley, Malaysia's most developed region and where the capital Kuala Lumpur is located.

The six-month programme would allow the government and participating firms to gather data and evaluate demand, while the government worked on drafting legislation to govern bike-hailing.

"Bike-hailing will be subject to similar regulations as laid out for e-hailing," the minister said, referring to existing ride-hailing operations by companies such as Grab.

Gojek's co-chief executive, Andre Soelistyo, told reporters on Nov 2 that the company was preparing expansion into Malaysia and the Philippines.

Gojek's Malaysia entry would likely pose the biggest challenge to Grab, which dominates its e-hailing market after it bought Uber Technology Inc's operations in South-East Asia last year.

Malaysia last month proposed a US$20.5mil (RM84.68mil) fine for Grab, which is backed by Japan's SoftBank, for allegedly violating competition law by imposing restrictive clauses on its drivers.

"Bring it on!" Grab Malaysia said on Twitter after Loke's announcement.

"It is indeed healthy competition." – Reuters

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