A logo of transport service Go-Jek is displayed on the helmet of one of the company’s motorcycle riders in Jakarta, Indonesia. (Photographer: Dimas Ardian/Bloomberg)

Go-Jek to Enter Singapore This Week in Challenge to Grab

(Bloomberg) -- Indonesia’s Go-Jek plans to roll out a preliminary version of its ride-hailing app in Singapore Thursday, bringing fresh competition to the hometown of arch-rival Grab, according to people familiar with the plan.

Go-Jek’s beta app will be available to a limited number of consumers before expanding it to a wider population as testing progresses, said the people, who asked not to be named because the information is not public.

Go-Jek to Enter Singapore This Week in Challenge to Grab

Many consumers and drivers have looked forward to Go-Jek’s entry after Grab cemented its grip on the city-state by agreeing in March to acquire the Southeast Asian business of Uber Technologies Inc., eliminating its primary competition in the region. Uber’s departure was followed by rising complaints from users about higher prices, delays and lapses in customer service. Drivers expressed frustration about reduced income.

“For Singapore, another ride-hailing competitor cannot come soon enough,” said Benjamin Roberts, a Singapore resident unhappy with Grab’s cancellations and surcharges.

Go-Jek Chief Executive Officer Nadiem Makarim has said the company will enter the Singapore market with promotions, without disclosing specific timing.

“It’s time to rebalance the equilibrium and add a lot more consumer- and driver-friendly policies and introduce some competition,’’ Makarim said in an interview with Bloomberg TV’s Haslinda Amin during Bloomberg’s New Economy Forum this month. “But it will be a healthy competition. At the end of the day, the biggest factor will not be in the price competition but on how we treat our drivers.”

Grab and Go-Jek are two of the most valuable startups in Southeast Asia. Grab is valued at $11 billion, according to the research firm CB Insights. Go-Jek was said to hit about $5 billion this year.

Go-Jek to Enter Singapore This Week in Challenge to Grab

Some companies have have been filling the void from Uber’s departure. ComfortDelGro Corp., Singapore’s largest taxi company, has benefited as consumers looking for another choice turned to its app. Its shares surged to as high as S$2.51 on June 5, a 33 percent surge from its low point in 2017 as Grab and Uber competed for market share with discounts.

Go-Jek to Enter Singapore This Week in Challenge to Grab

One ride-hailing startup called MVL Foundation Pte has signed up 23,000 drivers and 150,000 riders since launching its app called Tada in July. The service took off mainly through word of mouth.

“We listened to the feedback of drivers from the start and went for zero commission for drivers,” compared with the 20 percent commission charged by Grab, said Kay Woo, founder and CEO of MVL. “Our drivers became marketers for us.”

Go-Jek’s international expansion marks a major milestone for a company that started out by introducing a mobile app in 2015 to let people book cheap motorcycle taxis in traffic-snarled Jakarta. Since then, the company’s become a household name in its home country. Besides its ride-sharing service, Go-Jek is Indonesia’s largest food-delivery business and the leading digital-wallet provider.

Grab CEO Anthony Tan said the looming competition will push the company to improve.

Go-Jek to Enter Singapore This Week in Challenge to Grab

“The question is, who can out-execute? It shouldn’t be about who has the mega P&L to subsidize crazy amounts of promos, which I am sure all of you are hoping for,” he said at a dinner in Singapore Tuesday. “The truth is there’s going to be effectively more competition and that’s the only way to keep us all honest and innovative.”

©2018 Bloomberg L.P.