GOTO - Govt Pushes 20% THR for Drivers

GOTO - Govt Pushes 20% THR for Drivers The Indonesian government urged GoTo Gojek Tokopedia (GOTO) and Grab to provide THR (holiday bonus) to drivers. The Manpower Ministry is drafting guidelines with bonuses may reach 20% of drivers’ monthly income, based on performance. (Source : Bloomberg Technoz) Comment : The implementation of THR may result in drivers being formally classified as recipients, making the bonuses subject to taxation and potentially reducing their take-home pay. While framed as a welfare initiative, the policy could also reflect an effort to increase government tax revenue. Moreover, the financial burden on platforms is likely to be passed on to consumers through higher fares, which may erode the overall value proposition of ridehailing services. The heightened regulatory scrutiny particularly following reports of Grab’s proposed USD7 bn acquisition of GOTO also signals growing pressure on platforms to address driver safety and commission practices. Nonetheless, merger approval remains possible, provided sufficient concessions are made to enhance driver protections and benefits.