LTFRB: Indonesian ride-hailing firm, Go Jek, can’t operate in PH

The Land Transportation Franchising and Regulatory Board (LTFRB) has rejected the application of Indonesian ride-hailing company Go Jek to operate in the Philippines over foreign ownership issues.

Go Jek’s rejection further cements Grab’s hold on the Southeast Asian market, particularly in Manila, where the Singapore-based firm has captured 90 percent of the market, according to local anticompetition officials.

LTFRB Resolution No. 96 signed on Dec. 20 denied Go Jek’s application through its local subsidiary, Velox Technologies Philippines, for violating Section 11, Article 12 of the Philippine Constitution.

According to the law, a public utility franchise should be issued only to companies that are 60-percent Filipino-owned. Velox Technologies’ articles show that it remains 99 percent owned by Singaporean citizens.

Under Department Order No. 2018-13, transport network vehicle services (TNVS) like Grab are treated as public utilities because of their role in mass transport.

Because of this, transport network companies like Go Jek must comply with the constitution which limits foreign equity to 40 percent, according  to communications director Goddes Hope Libiran of the Department of Transportation (DOTr).

While Grab hails from Singapore, its local subsidiary, MyTaxiPH, complies with the foreign ownership requirement.

Should Go Jek reconstitute its ownership and board composition, it can appeal for reconsideration, Libiran said.

Go Jek statement

In a statement, Go Jek said the company “continues to engage positively with the LTFRB and other government agencies, as we seek to provide a much needed transport solution for the people of the Philippines.”

With Go Jek facing a roadblock, the Philippine ride-hailing industry remains split among 10 players: Grab, u-Hop, Micab, Hype, e-Pick Me Up, Owto, Hirna, GoLag, Ryde and SnappyCab. Grab and u-Hop have yet to renew their accreditations.

Grab’s s most serious competitor, motorcycle-hailing app Angkas, was edged out of the market last year after the Supreme Court stopped a lower court from preventing DOTr and LTFRB from apprehending Angkas drivers.