Grab will have to remain unchallenged for now
Indonesian ride-hailing platform Go-Jek has been denied entry into the Philippine market by the Land Transportation Franchising and Regulatory Board (LTFRB).
According to Rappler, the Indonesian-based ride-hailing platform was denied the application via its local subsidiary Velox Technology Philippines, according to Resolution No. 096 dated December 20, 2018 issued by the government agency.
LTFRB cites foreign ownership rules as the reason for the denial since Velox Technology Philippines Inc’s article of incorporation shows that it’s almost wholly owned by its parent company Velox South-East Asia Holdings, which is Singaporean.
If Go-Jek was not let in because of foreign ownership rules, why was Uber allowed to operate when it was clearly owned by a foreign entity? Simple – back when they were operating, the Department Of Transportation and Communications, under the Aquino administration, issued DO 2015-011 that only recognized ride-hailing services as new forms of transport services. When Uber was operating, it was registered at the Securities and Exchange Commission as a telecommunications service under “foreign stock.”
That changed when the Department of Transportation issued DO 2017-11 in June last year, which recognizes transport network vehicle services (TNVS) as public transport.
That basically means Grab will continue to operate unchallenged by a company that has the financial means to compete head-to-head with them. While there are several local alternatives, none of them have the deep pockets that Go-Jek has to break the virtual monopoly of Grab.
