Uber isn’t big on negotiating and is always looking to get ahead of its competitors in terms of market share. However, the $68 billion ride-hailing giant once did consider and agree to signing a non-compete agreement with Indonesian bike-hailing giant Go-Jek. This happened over a year before the company made its surprising exit from China, by selling its operations to homegrown rival Didi Chuxing.
This development was first reported by TechCrunch. Citing a source involved in the discussion, the report says that the two companies approached each other with the plan to collaborate and take on a common enemy. This agreement meant Uber and Go-Jek would not compete directly against each other in Indonesia (a prominent and growing economy of Southeast Asia). It implied that Uber will now stick to running its cab-hailing business, while Go-Jek will handle operations of the bike-hailing market.
With this agreement, the tech giants were gunning for Singaporean ride-hailing giant Grab, who had been aggressively making strides in Indonesia. But, the agreement couldn’t go through due to founder and CEO Travis Kalanick’s intervention. When he came to know about the non-compete deal, the source says, he scrapped it as the company didn’t want to miss out on any business opportunity.
And the same has happened since. There was just a moment’s wait before they took steps to release products to tackle its competitor. The market, thus, witnessed Uber introduce its ‘Moto’ bike-hailing service and Go-Jek step foot in the cab-hailing ecosystem with the addition of GoCar to its platform a month later. Each of the two tech behemoths now is not only worried about a third enemy but also going after each other’s throat. This also hasn’t stopped Grab from taking steps to introduce two-wheeler services on its platform.
Further, the biggest question which remains unanswered is whether Go-Jek would’ve benefitted due to the aforementioned agreement with Uber. In my opinion, this deal wouldn’t have given the Indonesian giant enough wiggle room to further expand into new avenues. It would have been restricted to one category, attempting to tackle the growing market while rivaling Grab, who could launch services it offered (and it did). However, it might have made sense to merge and work with Uber at that time.
But, such an agreement is now out of the question. Over the past couple years, Go-Jek has attracted massive investor interest and has grown to be valued at $1.3 billion. Recently, it has picked up a massive $500 million from the likes of Sequoia India, Northstar Group, DST Global, Rakuten Ventures, Warburg Pincus and others to fuel its expansion in the country. It has also made a couple acquisitions, such as Pune-based app development firm LeftShift Technologies and Bengaluru-based online healthcare marketplace Pianta to add-on to its services.