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Southeast Asia’s Ride-Hailing War Is Being Waged on Motorbikes

December 8, 2017

Go-Jek, which started its main app in 2015 and is in only Indonesia at the moment, is counting on people coming back to its services again and again as it competes against both Uber and Grab, a Singapore-based ride-hailing company operating in seven Southeast Asian countries.

“We have huge respect for Uber as a technology company,” said Nadiem Makarim, Go-Jek’s 33-year-old founder and chief executive. “But we just out-innovate them. We just move that much faster.”


Go-Jek drivers waiting for ride requests on a street in Jakarta, Indonesia.Credit Kemal Jufri for The New York Times

Go-Jek started its main app in 2015 and is in only Indonesia at the moment.Credit Kemal Jufri for The New York Times

Southeast Asia, a region of 600 million people that is adding more internet users each month than anywhere else on the planet, has become a magnet for tech investment — and one of the toughest battlegrounds for Uber, which is under pressure to curb its losses around the world ahead of a planned public offering.

Grab, which was valued at $6 billion after its latest fund-raising, recently said it had completed its billionth ride. By contrast, Lyft, Uber’s largest American rival, has reached half that.

“It is a super growth market,” said Brooks Entwistle, chief business officer in Asia for Uber, which on Friday announced it had agreed to form a joint venture with a Singapore taxi company to strengthen its competitiveness in the region. “There’s no question there are challenges.”

China’s biggest tech companies, spying opportunity in the region, have contributed to those challenges.

Go-Jek is backed by Tencent Holdings, the video game and social media behemoth. Grab this year received a combined $2 billion in investment from Didi Chuxing, the ride-hailing powerhouse that outgunned Uber in China, and the Japanese conglomerate SoftBank.


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Outside of transport, the Alibaba Group, which dominates online shopping in China, controls a regional e-commerce company called Lazada and has invested in Tokopedia, an Indonesian site. Tencent is a major shareholder of Sea, a Singapore-based company that operates a video game platform, shopping site and digital payments service.


Employees at Go-Jek’s office in Jakarta, Indonesia.Credit Kemal Jufri for The New York Times

Go-Jek’s founder and chief executive, Nadiem Makarim, has built the start-up into a company valued at $3 billion.Credit Kemal Jufri for The New York Times

Before ride-hailing apps came along, motorcycle taxis, or “ojek” in Indonesian, plied Jakarta’s clogged streets.Credit Kemal Jufri for The New York Times

“We all looked to China” to learn to develop e-commerce, said Nick Nash, Sea’s president. “The playbook was clear.”

It is no accident that Jakarta has attracted so many companies that help people get around — or that help them avoid having to get around in the first place.

The capital of the world’s fourth-most-populous nation has 10 million residents but no metro system. The traffic is so soul-crushing at all times that many residents have stopped speaking of discrete rush hours.

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“In Southeast Asia, there’s little public transport, many dense cities and low car ownership,” said Ming Maa, Grab’s president. “It makes ride-sharing a much more compelling product than in India or even, frankly, China.”

Before ride-hailing apps came along, motorcycle taxis, or “ojek” in Indonesian, plied Jakarta’s clogged streets. But getting a good price required haggling. And safety was a concern, particularly for women.

Go-Jek is a “lifesaver,” said Hera Diani, a magazine editor in Jakarta. She orders food on the app, and booked a pedicure through Go-Life when she was pregnant and couldn’t walk easily. “The traffic jams are getting worse and worse,” she said.

Both Grab and Go-Jek are making big pushes outside transportation. The companies want their app-based wallets to replace cash as the main way Indonesians pay for coffee, fried rice and everything else offline, as is commonplace in Chinese cities.

It is unproven, though, that people will stick with a payment app just because they use it for rides. China’s dominant mobile payment services, AliPay and WeChat Pay, grew big because they could easily be used to buy stuff online and transfer money to friends, respectively.

“Transport is a very, very large marketplace — I would argue, larger than e-commerce,” said Mr. Maa of Grab. “We think that creates the right ground for an amazing payments company.”

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