Go-Jek is forced to pause expansion to the Philippines

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The Land Transportation Franchising and Regulatory Board (LTFRB) of the Philippines said that there’s been a violation taken place

Following its region-wide expansion, Indonesia’s ride-hailing unicorn Go-Jek is reportedly forced to pause its expansion plan to Philippines, as told by Rappler yesterday. In the Resolution No. 096 dated December 20, 2018, the Land Transportation Franchising and Regulatory Board (LTFRB) of the country denied Go-Jek’s entry due to the company’s local subsidiary Velox Technology Philippines’ violation.

As a transport network company (TNC), the local subsidiary is said to violate the foreign ownership rule in public utility. This resulted in the rejection of the company’s application to start operation in the Philippines.

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“This committee resolves to deny applicant Velox Technology Philippines Inc’s petition for accreditation as a transport network company due to its failure to file a verified application as prescribed in the item (II) first paragraph of Memorandum Circular No. 2015-015-A dated 23 October 2017 and for being a foreign-owned corporation in violation of Section 11 Article XII of the 1987 Philippine Constitution,” the dispositive portion of the resolution said.

Under the Constitution, franchise for public utility should be granted to Filipinos who own at least 60 per cent of its capital, while Velox is 99.99 per cent owned by its parent company, Singaporean Velox South-East Asia Holdings.

LTFRB pre-accreditation committee chairman Samuel Jardin confirmed to Rappler that Velox’s application was denied, signed by himself and panel members Carl Marbella, Nida Quibio, and Joel Bolano.

However, Jardin said that Velox can still appeal the decision.

“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,” Go-Jek told Rappler.

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Right now, Grab is still holding the market share for ride-hailing service in the Philippines.

The post Go-Jek is forced to pause expansion to the Philippines appeared first on e27.

Source: E27