Malaysia becomes new battleground for Grab and Gojek, says GlobalData

Following the news that Malaysia will allow motorcycle-hailing firms such as Indonesia’s Gojek and local start-up Dego Ride to operate on a limited scale from January 2020;

Animesh Kumar, Director of Automotive Consulting at GlobalData, a leading research and consulting company, offers his view:

“It is a welcome move in Malaysia, in which ride-hailing user-penetration is nearly double than that of the overall Asia-Pacific region. The country is among key motorcycle markets in the world. The move will allow home-grown ride-hailing start-up Dego Ride to restart operations. More importantly, it paves way for Gojek’s entry in to the country, where Singapore-based Grab has been enjoying a near-monopoly after the exit of Uber from Southeast Asia.

“Gojek was founded in 2010 with bike taxi e-Hailing and delivery services. Backed by investors including Alphabet Inc’s Google, JD.com Inc and Tencent Holdings, the company is valued between US$9-10bn. Grab was founded in 2012 as a taxi aggregator before adding other services. After getting a big cash boost from SoftBank’s massive tech fund in March 2019, the company is valued at US$14bn.

“Both describe themselves as ‘super app’ that is intended to be a one-stop solution for customers for their daily needs including transportation, payments, food and entertainment. While Grab has covered all bases in core e-Hailing offerings, Gojek has strong portfolio of additional services such as delivery services, home cleaning and repairs.

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Grab and Gojek have been competing in several markets including Indonesia, Singapore, Thailand and Vietnam. Malaysia will now be the new battleground and as a result drivers/riders as well as customers will benefit from the competition. In addition, the introduction of the new segment will increase the size of the ride-hailing market.

“Over the next six months, bike e-Hailing companies will be able to start limited operations and test the demand. Legalization and uptake of bike taxi e-Hailing will help Malaysia in its efforts towards strengthening the overall ecosystem of public transportation as bike e-Hailing is effective in offering first and last mile connectivity.”

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