According to Financial Times News, Grab and GoTo are negotiating a potential $29 billion merger that would create Southeast Asia’s dominant ride-hailing player. The key sticking point involves offering Indonesia’s sovereign wealth fund Danantara a “golden share” with special rights over the Indonesian operations. This would give the government direct influence over critical issues like driver pay and working conditions. The combined entity would control a staggering 90% of Indonesia’s ride-hailing and food delivery market. GoTo alone employs 3.1 million drivers across its various services. Both companies have seen their market values plummet since their 2021 and 2022 IPOs, with GoTo down more than 80% and Grab down over half from their combined $72 billion peak valuation.
The political realities of gig economies
Here’s the thing about operating at this scale in emerging markets: you’re not just running a tech company anymore. When you employ 3.1 million drivers in a country where informal work is increasingly crucial, you become a political entity. The government wants assurances about social stability, worker treatment, and economic impact. That golden share isn’t just about ownership—it’s about giving Indonesia a permanent seat at the table for decisions that affect millions of voters. And given recent protests where gig workers demonstrated their collective power, including after a driver’s death during demonstrations, regulators are paying close attention. Basically, you can’t control 90% of a market this sensitive without government blessing.
Why this merger makes sense now
Look, both companies are bleeding money from years of brutal competition. Having two rivals constantly undercutting each other on pricing and driver incentives has crushed profitability. A merger would immediately stop the price wars and create significant cost synergies. But the ownership structure has always been the elephant in the room. GoTo’s CEO called his company a “national champion,” which is corporate-speak for “we’re not letting Singapore-based Grab just take over our domestic operations.” The golden share proposal seems like the creative solution that lets both sides save face while achieving the economic benefits. SoftBank, which owns stakes in both companies, has been pushing for this for years—they’re tired of watching their investments fight each other into the ground.
What happens from here
The December 17 shareholder meeting for GoTo adds another layer of drama, with SoftBank reportedly seeking to oust CEO Patrick Walujo over the company’s poor stock performance. That timing isn’t coincidental—it puts pressure on management to deliver some kind of strategic win. But given past failed merger attempts, analysts are rightly skeptical about whether this deal actually gets done. The golden share concept is innovative, but will it satisfy both companies’ boards and shareholders? And what happens when you give a government direct control over business operations? It creates precedent that could scare off future foreign investment. Still, the economic logic is undeniable—these two need to combine to stop the bleeding. The question is whether the political and structural hurdles can be overcome this time around.
