TEMPO.CO, Jakarta - The Commission for the Supervision of Business Competition (KPPU) will investigate into predatory pricing by ride-hailing services, such as Uber, Go-Car and Grab. “We will summon parties related to this case,” the KPPU chairman Syarkawi Rauf said.
Earlier last week, the Organization of Land Transportation Owners (Organda) said it has filed a report over alleged predatory pricing, a pricing strategy where a product is set at a very low price, often under production cost, to drive competition out of the market. “Under the disguise of promotional tariffs,” Organda central executive board chairman Adrianto Djokosoetono said.
Organda noted that taxi companies are currently struggling after failing to compete against ride-hailing services. He pointed to the declining number of Express taxis owned by PT Express Transindo Utama from 12,000 to 3,000. PT Weha Transportasi Indonesia Tbk, the operator of White Horse taxis, had even stopped operation. “Taxiku Group now only operates at Soekarno-Hatta airport,” Adrianto said.
Adrianto said that despite offering similar taxi services, Uber, Go-Car and Grab set the prices of their services without government’s approval, unlike conventional taxi companies. Adrianto has urged the government to issue a fair regulation for transportation companies and ride-hailing services.
Grab Indonesia managing director Ridzki Kramadibrata has denied the allegation of predatory pricing. Ridzki said that Grab's technology allows drivers to be 60 percent more productive compared to conventional taxi drivers. “Despite lower fares, the total income is still higher,” he said. He added that commission deducted from Grab drivers is lower compared to that of conventional taxi companies, allowing them to set lower fares. Other ride hailing companies could not be reached for comment.
KHAIRUL ANAM
