Indonesia based motorcycle on-demand company Go-Jek has reportedly closed a new USD 1.2 billion round led by Tencent. Post this investment, the company is valued at USD 3 billion. The development however hasn’t been publically disclosed by the two companies yet and has been reported by TechCrunch citing sources close to the development. An official announcement is expected soon.

(Image: Go-Jek Driver by blogdino/ CC BY 2.0)

There is no information on what other investors have participated in the round though it is expected that they come from the existing pool of stakeholders. Go-Jek previously reported a USD 550 million round in which the funds came from KKR, Warburg Pincus, Farallon Capital and Capital Group Private Markets along with then existing investors Sequoia India, Northstar Group, DST Global, NSI Ventures, Rakuten Ventures and Formation Group. The previous round valued the company close to USD 1.3 billion making it the first Indonesian unicorn startup.

Apart from motorcycle taxi service, Go-Jek operates payment system, food delivery service and courier service. Go-Jek has over 200K drivers across 25 Indonesian cities with 20 million app downloads. Competing against Uber and Singapore based Grab on many fronts, the funds will fuel Go-Jek to aggressively face the rivals. It is also possible that Tencent might explore fresh opportunities in the mobile payment space with Go-Jek by leveraging WeChat.

Source: TechCrunch

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Karnataka government has been quick to dismiss the idea of recently launched bike taxis. Soon after the launch of UberMOTO and Ola Bike, transport department officials in Bangalore deemed them illegal and issued a notice early last week. This is because there are no rules for two wheelers under the Motor Vehicles Act and therefore no room for commercial use of the same.

Bike taxis are very popular in some Southeast Asian countries and hold the potential to reduce congestion issues in Tier 1 cities in India. However it is a fresh concept in India and the lack of any regulations will be the bottleneck for companies trying to enter this space. Motorcycle rental industry in India also faces challenges because of the same reason.

Another recent introduction by the cab hailing companies, ride sharing, has also ended up on wrong side of the law. Multiple cabs have been seized citing the reason that they have contract carriage permit but picking up multiple passengers means that they are operating as stage carriages. While on one hand, the government is inviting innovations from private players in transportation sector, it has been slow in adopting the trends. We got to see similar situations when these cab companies started operations in India and they were deemed illegal because there was no regulation for the same.

Despite the challenges, investors haven’t shyed away from this segment. The bike taxi and grocery delivery app NOW has recently raised USD 200K in angel funding. Considering the fact that bike taxi services are functional for a while in Gurgaon and Baxi, one of the operators, is further expanding to new regions in NCR like Noida and Ghaziabad, we can expect the operators and government to find a middle ground soon. But even after the regulations are in place, new players in the bike taxi space won’t make progress easy for Ola and Uber.

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In another one of its experiments focused on local markets, Uber is launching its bike taxi service in Thailand. The new service is called UberMOTO and allows travellers to call motorcycle cabs for local commute. According to the press release by Uber, the service is aimed at addressing the severe traffic congestion problems. According to Uber, over 1500 new cars are added to the streets of Bangkok every day and as a result, the traffic speeds have dropped below 16 kmph which isn’t good for productivity.

UberMOTO, the motorcycle taxis, can be called similar to any other Uber cab using the app. The drivers are verified through their standard procedure similar to all the other cab drivers that work with Uber. The drivers will carry a helmet for the passengers they pick up.

While they haven’t said anything about a launch in any other markets, there are many other markets in Asia including India where this concept could be a huge success. Congestion and rising pollution levels are major issues in almost all major cities in this region and reducing the dependence on cars as a transport option is being seen as a solution to the problems.

To promote this initiative and raise awareness about motorcycle safety, Uber will be engaging in offline activities in association with Thai Traffic Police and Head Awareness Club to engage with young people.

The success of this pilot project will define their steps in bike taxi segment in other markets. In India we already have such services operational in Gurgaon. As a launch promotion, Uber is offering free rides to first time users until March 15.

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