The potential merger between Southeast Asia’s two ride-hailing giants, Grab and Indonesia’s GoTo Gojek Tokopedia Tbk, has triggered a wave of controversy, pushback from labour groups, and heightened scrutiny from Indonesian regulators. While the proposed deal promises operational efficiencies and improved financials, critics warn that it risks entrenching a monopoly, threatening livelihoods, and undermining national economic sovereignty.

Labour unions warn of monopoly and driver exploitation

The Indonesian Transport Workers Union (SPAI) has emerged as a vocal opponent of the merger, citing data from Euromonitor International suggesting that a combined Grab-GoTo entity would control 91% of Indonesia’s online transportation market and up to 85% across Southeast Asia. SPAI Chairperson Lily Pujiati pointed to Indonesia’s Law No. 5/1999, which prohibits monopolistic practices and unfair competition, warning that this deal would cross that legal threshold.

Lily also highlighted past consequences from the Gojek-Tokopedia merger that formed GoTo in 2021. She claimed that post-merger cost-cutting measures severely impacted driver earnings—citing an example where incentives for eight deliveries dropped from IDR30,000 ($1.84) to just IDR8,000, and bonuses for 15 deliveries fell from IDR100,000 to IDR37,500. SPAI is urging the Business Competition Supervisory Commission (KPPU) to launch a full investigation, and has called on lawmakers to fast-track legal protections for gig workers as part of the Manpower Bill, Tempo.co reports.

Regulatory ambiguity and corporate denials

While public speculation grows, both companies remain tight-lipped. Grab Indonesia’s Chief of Public Affairs, Tirza Munusamy, denied any formal discussions, claiming the rumors were “not based on verified information.” GoTo’s Corporate Secretary, R.A. Koesoemohadiani, also said there were “no agreements with any party,” despite reports that the firm had received multiple partnership offers, Tempo.co reports.

Meanwhile, KPPU Chair M. Fanshurullah Asa clarified that Indonesia’s post-merger notification system prohibits pre-emptive rulings before an official filing. However, the agency has launched an internal study to assess the potential impact of a deal and hinted at possible sanctions, including nullification, if the merger breaches competition law, according to reports by Indonesia Business Post.

Political pushback: national interests at stake

The merger’s nationalist implications have also struck a nerve. GoTo, which was born from two of Indonesia’s most celebrated startups, Gojek and Tokopedia, is widely seen as a symbol of national digital innovation. Yet its 2024 annual report shows 73.9% of its ownership is in foreign hands, including major stakes by SoftBank and China’s Alibaba.

Deputy House Speaker Sufmi Dasco Ahmad told Reuters that the government wants GoTo to be majority-owned by Indonesians, although he did not clarify how that might be achieved. Government sources cited by Reuters also indicated that any merger would require guarantees of job security, better driver benefits, and protections for consumers.

Financial motives vs public interest

Behind the scenes, the proposed deal appears financially motivated. According to Bloomberg, Grab is exploring a $2bn loan to acquire GoTo at a valuation of around $7bn. Grab, valued at $19bn, is narrowing its losses and reported $852mn in net cash from operations in 2024. In contrast, GoTo posted a $331mn loss last year, down from over $1bn in 2023. The company has made dramatic cuts to survive, spinning off Tokopedia and reducing operating expenses by 28% year-on-year, as reported by The Diplomat.

While Grab’s expansion in Indonesia has plateaued, its markets in the Philippines, Thailand, and Vietnam grew 24% in 2024, compared to just 6% in Indonesia. With profitability finally within reach, absorbing GoTo may seem like a strategic shortcut to reclaim growth and consolidate regional dominance.

The path forward: national dilemma or corporate necessity?

Despite corporate denials, reports from Reuters and The Diplomat suggest that talks are indeed underway, albeit complicated by government-imposed conditions and mounting public backlash. Grab’s recent $1.5bn convertible notes issuance, which cited acquisitions as a primary use of funds, further reinforces market suspicions.

Ultimately, the Indonesian government faces a tough balancing act: support for efficient private-sector consolidation versus the imperative to protect local workers, preserve economic sovereignty, and uphold fair market competition. Whether the merger proceeds or stalls, it has already reignited debate over how Indonesia navigates foreign capital, platform economics, and the rights of its digital workforce.