Indonesia’s Go-Jek suffered a setback to its expansion plans in early January after the Philippines transport regulator rejected the company’s application to launch a ride-hailing service, saying its domestic unit did not meet local ownership criteria.
The Land Transportation Franchising and Regulatory Board (LTFRB) of the Philippines said the issue is that Go-Jek’s Philippines-based business — an entity called Velox Technology Philippines — is majority owned by an overseas business, namely Go-
Jek’s own Singapore-based Velox Southeast Asia Holdings.
Go-Jek applied for a license to operate in Manila in August 2018, but later in the same month, ride-hailing was added to a list of industries where foreign ownership is limited to 40%. According to the LTFRB, Go-Jek’s ownership violates local laws, which stipulate that at Philippines individuals or entities should own 60% of the company.
Martin Delgra, Chairman of the LTFRB said that “Velox does not meet the citizenship requirement and the application was not verified in accordance with our rules.”
Moving forward, Go-Jek has two options. The first is to appeal the decision while the second is to team up with Filipino investors to reach the 60% limit. The company has said that it will announce its path forward by the end of January.
A Go-Jek spokesman noted that: “we continue 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.”