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Go-Jek loses appeal in Philippines, dashing hopes to chase Grab

Indonesian unicorn rejected over foreign ownership rules

Go-Jek is expanding outside its home market of Indonesia in its battle with Singapore-based Grab.   © Reuters

MANILA -- A Philippine transport regulator has rejected a new request by Indonesian ride-hailing company Go-Jek to offer services in the country, due to restrictions on foreign ownership.

The Land Transportation Franchising and Regulatory Board denied Go-Jek's appeal to overturn an earlier decision that denied its local affiliate, Velox Technology Philippines, an operating license. Martin Delgra, the board's chairman, in January said Velox did not comply with a requirement that ride-hailing companies be at least 60% Filipino-owned. One report said a Singapore-based unit of Go-Jek owns 99% of Velox Technology Philippines.

Jay Sabale, a spokesman for the board, said the latest decision is based on the same violation. "They can't come here unless they follow what's written in the law," he said on Tuesday.

Go-Jek's latest setback allows Singapore's Grab to cement its dominance in the Philippine ride-hailing market, which has been called a "virtual monopoly" by the country's antitrust watchdog.

"Go-Jek is disappointed with the LTFRB's decision to deny our motion for reconsideration, and our offer to address Filipino commuters' urgent need for more transportation options," a Go-Jek representative said.

"Commuters in Singapore, Vietnam and Thailand, as well as Indonesia, benefit from our technology every day. But due to this decision, it seems drivers and commuters in the Philippines will have to wait a bit longer," the representative added. "We will now explore our options."

Bloomberg reported in early March that Go-Jek was in talks with Philippine conglomerate Ayala Corp. over its prospective entry into the Philippines. Ayala officials declined to comment on the report.

Go-Jek, which counts Google and Singaporean sovereign wealth fund Temasek Holdings among its investors, has been expanding in Southeast Asia to compete with Grab, which took over the regional businesses of U.S. rival Uber Technologies last year.

The Indonesian unicorn sees potential in the Philippines, the second-most populous country in Southeast Asia after Indonesia. In January, it acquired a majority stake in mobile payment service coins.ph in a deal worth $72 million, according to reports.

Nikkei staff writer Shotaro Tani in Jakarta contributed to this report.

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