Indonesia's leading automobile distributor, the Astra International group, will form a joint venture with Go-Jek to provide more four-wheeler vehicles for its drivers. The collaboration is expected to expand Go-Jek's fleet as its rise to dominance in the largest ride market in Southeast Asia.
Astra signed the deal that will allow them to add investment amounting to $100 million into the Indonesian unicorn and lift its total funding of Go-Jek to 250 million. The deal will add several thousand cars equipped with Astra's fleet management system to Go-Car, the four-wheel ride-hailing service of Go-Jek's. The deal will require drivers to pay a subscription fee to use the vehicles that include payments for the maintenance of the cars and their insurance.
Prijono Sugiarto, the president director of the conglomerate, the joint venture, and Astra's new funding demonstrate their continued confidence in Go-Jek and represent a tangible manifestation of their collaboration to explore the synergies between Go-Jek's technology and Astra's automotive business. He added that they hope that collaboration can help more people generate income, as this will improve their welfare and have a positive impact on Indonesia's economic growth.
Astra's investments included businesses that are involved in mining, plantation farming, and the financial sector.
In June the Indonesian government will impose a regulation that will block individuals from operating a car-hailing business on their own. The operators need to be either a state-owned enterprise, regional government owned, a limited liability company or micro and small business actors.
Go-Jek's operations started as a ride-hailing app for motorbikes which expanded into a delivery service platform for goods ranging from food to house cleaners. The billion-dollar company started its expansion in Southeast Asia last year as they compete with Grab, its Singaporean rival. The main operations of Go-Jek remain in Indonesia, it has the largest potential in terms of ride-hailing.
The report from Google and the investment firm Temasek said that by 2025, the online transportation and food delivery are expected to reach $14 billion which is more than triple of the size of the industry in its neighboring rivals like Singapore and Thailand. Google and Temasek are both investors of Go-Jek.
The agreement between the two firms will help Astra retain its lead in Indonesia's auto market. The automobile distributor currently contributes about 50 percent of sales in the auto market of Indonesia. Jardine Matheson Holdings, a business firm that controls Indonesia's biggest supermarket chain and Mandarin Oriental Hotel Group owns more than 50 percent of Astra's shares.
