What does this mean for users?

[Article has been updated on 3 December 2020, 4:22pm]

In recent years, Grab Holdings and Gojek have been embroiled in a long and costly battle for supremacy in the Southeast Asian region.

According to annual filings, Grab burned money and lost over $ 200 million in 2019.

To solve this problem, since last year they are working on a merger between the two giants Ride-Hagel and Food Delivery.

According to The Straits Times, Grab and Gojek made “significant progress” yesterday (December 2) in working out the terms of the transaction.

A well-supported structure plans for Anthony Tan to become CEO of the merged company, while Gojek executives run the business in Indonesia under the Gojek brand, The Straits Times reported.

The ultimate goal is to become a publicly traded company, but the two brands can operate separately for an extended period.

Thursday, December 3, Grab informed its employees in an internal memo that “the company is in a position to make acquisitions”.

“Our business is doing well and, like all market consolidation rumors, we can acquire them,” said Anthony Tan, co-founder and CEO of Grab.

While some details have yet to be finalized, those familiar with the conversations said the two startups managed to narrow down some disagreements.

Grab and Gojek declined to comment.

The largest Internet merger in Southeast Asia

Today, Grab and Gojek are considered to be one of the biggest startups in Southeast Asia.

Grab is represented in eight countries and was recently valued at over $ 14 billion (S $ 18.75 billion), while Gojek is present in five countries and is worth $ 10 billion (S $ 13.38 billion)) a .

The possible merger would be “the largest Internet merger in Southeast Asia”.

Investors have long pushed the two startups to join forces across Southeast Asia. Masayoshi Son of SoftBank Group, a major investor in Grab, is also currently involved in merger negotiations.

According to The Straits Times, SoftBank has been pushing for the deal since Masayoshi visited Indonesia in January.

What a Grab-Gojek merger will look like in Singapore

First, Singaporeans may be able to see more performances of Gojek in Singapore.

Gojek currently only offers anti-hail units in Singapore, but offers more than two dozen functions in his native Indonesia.

Although Gojek has disconnected some of its GoLife services, some features have been retained, such as GoMassage (spa and massage) and GoClean (housekeeping).

In an interview with TODAY, Gojek CEO Lien Choong Luen said bringing these services to Singapore was still a “business decision” and the company would continue to explore such options.

Additionally, since Grab and Gojek no longer face significant competition in the arena, they are unlikely to issue promo codes to attract new users to the platform as they once did.

Therefore, it will be important for the Singapore government to comply with its antitrust laws to ensure that consumers and other businesses are protected against anti-competitive practices.

With these laws, it is possible that more players come into the picture.

Right now, transportation apps are already rolling out quickly, with around half a dozen new apps to deploy in just a few weeks.

What’s in this for consumers?

Many Singaporeans probably remember the time when Grab and Uber had a price war in the country.

Back in 2016, when Grab faced stiff competition from Uber, consumers were amply rewarded with a series of promo codes from both hail control companies.

Both companies used predatory pricing, in which they fixed the cost of a service (ie travel) below the marginal cost to the seller.

In this way, the two companies were able to keep travel costs low for passengers while increasing their commitment to low cost travel, all with the sole aim of eliminating competition.

When Grab took over Uber’s Southeast Asian business in March, the two companies were fined a total of $ 9.5 million after the merger deal was found to violate the no-deal deals. -competition from Singapore.

The deal was deemed “anti-competitive” by the Singapore Competition Commission after months of merger investigations.

Likewise, Grab and Gojek are likely to monopolize the market, which will not benefit consumers.

While the merger benefits both companies in order to reduce costs, it is important that the government ensure regulations are in place to protect the interests of consumers.

Source of selected image: Kompas Tekno / SBR