GRAB Holdings Ltd. and GoTo Group were among ride-hailing and delivery services targeted by driver protests on Tuesday in Indonesia, with thousands gathering to demand better compensation and other terms.
The demonstrations come at a delicate time for the Southeast Asian internet leaders, as Singapore-based Grab has been negotiating to buy its Indonesian rival for more than $7 billion. Drivers in Indonesia, a country of more than 275 million people, are protesting what they describe as exploitative app policies and regulatory negligence.
More than 25,000 car and motorcycle drivers were expected to join the protests Tuesday afternoon and log off their ride and delivery platforms for 24 hours, according to the Garda Indonesia association for such workers. Many had traveled from towns across Java and Sumatra, and camped at locations across the capital.
Local media reports showed thousands of drivers gathering at several sites on Tuesday afternoon. The presidential palace, the transport ministry, the parliament, and app company offices were among sites targeted the protesters, as well as about a dozen other major cities including Yogyakarta and Surabaya, according to Garda. In Jakarta, the police said it would deploy more than 2,500 personnel to secure protest sites.
Like their peers globally, Grab and GoTo have been scrutinized by unions and regulators over terms for their drivers, who typically aren’t on payroll and don’t share the same benefits as full-time employees. Last week, an Indonesia transport workers’ union said it’s opposing the planned combination of Grab and GoTo on concerns that their increased market power could suppress drivers’ earnings, local news outlet Tempo reported.
The protest is organized by Garda, one of the country’s largest driver associations, which accuses the government of failing to enforce platform commission rules introduced three years ago.
“This is the peak of our frustration,” Garda Chairman Raden Igun Wicaksono said in a phone interview Monday. “We won’t stop until our demands are met. If they aren’t, the actions could escalate and tensions may rise.”
Drivers are demanding a 10% cap on platform commissions, removal of discounted ride programs, and regulated pricing for delivery services. They are also calling on Indonesian President Prabowo Subianto to sanction companies that violate existing transport rules, and urging parliament to convene a hearing with regulators, firms and driver groups.
Grab has never charged a commission higher than 20% for motorcycle services, Tirza Munusamy, chief of public affairs at the Indonesian unit, said in a statement on Tuesday. The company needs the current commission structure to maintain quality, safety and support of its platform and a commission cut would have impact beyond service quality, she said. Drivers can choose to join other platforms that charge lower commissions, she said.
“It is important to understand that differences in commission rates will affect the support and benefits partners receive,” she said.
Meanwhile, GoTo cited its 20% service fee as a way to maintain order volume and finance driver incentives among others, according to a statement from a company spokesperson. It said its services remain available and are running as normal during the protest.
Grab is moving forward with the takeover attempt, evaluating GoTo’s accounts, contracts and operations as they work toward a combination, Bloomberg reported in March. The companies are seeking to reach an agreement for a deal in the second quarter, Reuters reported this month.
Indonesia is Southeast Asia’s largest market for ride-hailing services. The protest involves drivers from multiple platforms, including GoTo, Grab, Maxim, InDrive, Lalamove and Sea Ltd.’s Shopee. A separate driver coalition says it won’t join the protest, calling it politically motivated, according to local media. –BLOOMBERG
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