Jakarta-based ride-hailing app Go-Jek’s bid for regional domination has encountered its first obstacle in the Philippines.
The country’s Land Transportation Franchising and Regulatory Board (LTFRB) has denied its entry into the market because its local subsidiary Velox Technology Philippines violates laws on foreign ownership in public utility franchises, Rappler reported.
The no-go came from the LTFRB’s pre-accreditation committee, the first level a Transport Network Company like Go-Jek must pass through to get accredited.
LTFRB Chairperson Martin Delgra confirmed this decision to Reuters today.
According to Delgra, Velox Technology Philippines “did not meet the citizenship requirement and the application was not verified in accordance with our rules.”
Section 11 Article XII of the Philippine Constitution states that at least 60 percent of a public utility’s capital must come from Filipino citizens.
Rappler reported that Velox Technology Philippines’ article of incorporation states that it is 99.99 percent owned by its parent company Velox South-East Asia Holdings, a company based in Singapore.
Go-Jek has not published a statement on the LTFRB’s decision but told TechCrunch that they have not given up on their plans to expand to the Philippines.
“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,” a representative told the website.
Word of Go-Jek’s expansion got out as early as April last year. Apart from the Philippines, it also plans to enter Singapore and Thailand. It is already present in Vietnam.
The Philippines’ ride-hailing app market is currently dominated by Grab, which acquired Uber’s services in Southeast Asia in March last year.
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