Indonesian ride-hail firm Go-Jek denied entry to Philippines due to high foreign ownership

11, Jan. 2019

By Darlene Basingan

MANILA, NNA – The Philippine government on Thursday denied Indonesian ride-hailing firm Go-Jek permission to operate locally, citing foreign ownership rules.

Jay Sabale, head of communications at the Land Transportation Franchising and Regulatory Board (LTFRB), said transport companies must abide by Philippine laws restricting foreign ownership.

Go-Jek’s local unit, Velox Technology Philippines Inc., is 99.9 percent owned by its parent, Velox Southeast Asia Holdings Pte. Ltd. registered in Singapore. The Philippine constitution limits foreign ownership in some business sectors to 40 percent.

"We continue to engage positively with the LTFRB and other government agencies, as we seek to provide a much-needed transport solution for the people of the Philippines," a Go-Jek spokesperson told NNA via email.

Go-Jek was established in 2010 and is one of Indonesia’s fast growing startups, offering transportation, digital payment and food delivery services. It is looking to expand in Southeast Asia and applied last August for a license to operate in Manila.

The U.S, ride-hailing company, Uber Technologies Inc., started operating in the Philippines in 2014 and has continued to gain popularity in Manila, a city plagued by traffic jams, a faltering train system and decrepit public transport vehicles.

Similar to other countries, ride-hailing firms initially faced challenges here, such as regulatory hurdles and opposition from taxi drivers and operators, who complainined they were losing income.

In 2015, the LTFRB recognized the growing popularity of the service and formed policies for their operation. Eight transport network firms are now accredited in the Philippines, including Grab, which continues to dominate the local market and is the major player in Southeast Asia since buying Uber’s operations in the region in 2018.

The Philippine government has set a cap on ride-hailing firms of 65,000. The industry is urging the LTFRB to increase that in line with growing popular demand.