Although GoTo Group and Grab officially aided one another within the pandemic to combine their operations. ESDM’s decision has the potential to dramatically reform Indonesia’s ride-hailing and food delivery landscape. Together, the two companies would create a door-opening behemoth. It would govern about 90% of the market, justifying major worries over possible monopolistic behavior. True to form, the Indonesian government is poised to approve the merger. This judgment has stoked controversies over competition and the fairness of corporate conduct.
The planned merger between GoTo Group, a prominent Indonesian technology company, and Grab, a major player in Southeast Asia’s ride-hailing and delivery services, could fundamentally alter the competitive dynamics in Indonesia. Enforcers and analysts alike have sounded the alarm that this kind of extreme develop across market power will undermine competition and create roadblocks to consumer choice. The combined company will control or drastically eliminate competition in virtually every market for ride-hailing services. They will further gain monopoly control over the food delivery industry nationwide.
Given these changes, drivers for both companies have made their anger known—most effectively by walking off the job in mass protests. These drivers are fighting back for the respect they deserve, including living wages and safer working conditions. The recent protests signal how increasingly organized these would-be workers have become in Indonesia. These workers are raising their voices to demand better treatment and fairer practices across the industry.
The Indonesian government is still making a decision on the proposed merger but all signs so far are that the government favors approval of the merger. This decision comes amidst a backdrop of growing scrutiny about market monopolies and their implications for both consumers and workers. We’ll be watching the government’s position very carefully. Various stakeholders are looking forward to seeing how it strikes a balance between fostering sustainable development of industry while maintaining open and competitive markets.
If approved, the merger between GoTo Group and Grab would significantly alter the business environment in Indonesia. This change would have an equally major effect on all other ride-hailing and food delivery services operating in the region. These smaller competitors will have a hard time surviving though in a market crowded by such a large player. Furthermore, this severe reduction in competition would stifle innovation and ultimately result in increased prices for consumers.