ComfortDelGro, Go-Jek in talks about a tie-up

Stalled deal with Uber raises option to run private-hire fleet

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Christopher Tan

Senior Transport Correspondent

Indonesian ride-hailing app provider Go-Jek is in talks with Singapore taxi giant ComfortDelGro Corp to explore a tie-up.

The Straits Times understands that representatives from the two companies have held preliminary discussions. Both companies, however, have refused to comment on the news officially.

ComfortDelGro’s agreement with Uber to acquire a majority stake in Lion City Rentals’ – a private-hire fleet operator here owned by Uber – is now in limbo. It would have given ComfortDelGro exclusive rights to use the app for its drivers but Uber has since pulled out of South-east Asia after selling its regional businesses to rival Grab.

The deal will lapse if it is not completed by September, which is now likely, since it is no longer attractive for ComfortDelGro to buy the rental fleet without having the app, a well-placed source said.

Instead the taxi group will buy its own cars – including vehicles which Lion City Rentals will have to dispose of – from the open market, and it could run the fleet with Go- Jek’s app. “It has to start a private- hire business,” the source said.

ComfortDelGro has been looking to find its place in the disrupted point-to-point transport sector ever since Uber and Grab entered the scene in 2013. The listed group’s cab fleet has shrunk by more than 20 per cent to 12,700 since the arrival of Uber and Grab.

Go-Jek, which has set up an office in Singapore, has made it known that it wants to expand its ride-hailing business into at least three regional markets outside Indonesia. Observers are certain that it will start a ride-hailing business here within the next few months.

National University of Singapore transport researcher Lee Der- Horng said Go-Jek needs a strong local partner and “ComfortDelGro can play this role nicely”.

Nanyang Business School adjunct associate professor Zafar Momin said a potential tie-up would allow Go-Jek to battle Grab outside Indonesia for the first time and give ComfortDelGro an alternative choice to Grab.

Separately, Prof Momin said such a deal would “mitigate the risk of a potential monopoly in Singapore’s ride-hailing business”.

SPH/ST