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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Motorcycle taxis were quick to gain popularity in markets like Indonesia and Thailand and owing to similar challenges, the trend was soon observed in India as well. While they have existed in one way or the other for long in many parts of the world, they were neither organised, nor regulated and thus continued to operate in legal grey area. With the motorcycle taxi apps coming in, the scale got attention and there has been friction and occasional suspension of services as well. Now however, the regulators in Indonesia are looking to draw lines to accommodate and control startups like Go-Jek and Grab Bike offering motorcycle taxi service.

This will involve revising Indonesia’s 2009 road traffic law and legalise motorcycle taxi as a public transport option. Under the current regulation, they are technically illegal but the law hasn’t been enforced strictly. Apart from occasional challenges, the services have been mostly functional and growing fast.

This however could go either way for the motorcycle taxi startups. Previously, when questions were raised about companies like Uber, the regulations ended up sparking a tug of war with ride hailing companies taking one side on issues like fare caps. There is still lack of clarity on how laws will be complied with and how they will be enforced. To top that up, some cities chose to have their own regulations further adding to the confusion. In fact, Depok has already issued rules for motorcycle taxis limiting some of their operating areas, primarily to prevent clashes with other transportation options. The regulations will now decide how the likes of Go-Jek will continue in Indonesia and how much effect they will have on other transportation options.

Source: JakartaGlobe

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Motorcycle taxis were already a popular means of transport in Thailand and was the first market for Uber to introduce UberMOTO motorcycle taxi service. The service was introduced in the region in February this year after almost two years of Uber being operational in the region. However the latest order by Thai government prevents them from operating the service for now. Grab, the other major player in the cab space in Thailand will also have to suspend its motorcycle taxi service.

Both the companies have to suspend their motorcycle taxi services because the Thai government determined that there is a conflict with existing network of taxis. The news has also been confirmed by Uber through a blog post on their website and that they are halting the service temporarily.

The launch of UberMOTO in Thailand was soon followed by other similar markets like India and Indonesia. While the service continues to run without any major hiccups in Indonesia, there have been regulatory issues in India as well. The India operations of UberMOTO were launched only few weeks after Thailand in Bangalore. The state government was quick to dismiss the idea of motorcycle taxis and deemed them illegal because there are no rules for two wheelers to be registered for commercial use. However, in other parts of India, the state governments are supporting the idea.

A news report by Reuters indicates that there are over 186,000 motorcycles registered to offer taxis in Bangkok and the authorities have started cracking down on riders employed by Grab or Uber. However, Uber is optimistic about Thailand as expressed in the blog post. It says, “We are pleased that the Thai Government is open to discussing new rules that would enable services like UberMOTO for passengers to operate”.

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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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