JAKARTA: Indonesia is preparing to launch regulations fixing the rates drivers and riders for ride-hailing services such as Grab and Go-Jek receive, two government officials said this week, creating potential obstacles for the companies’ expansion.
The regulations would meet drivers’ demands for more oversight and higher rates but there are concerns that the rising costs to the companies could stifle their development as they battle to dominate the ride-hailing market in Southeast Asia’s biggest economy.
Singapore-based Grab and home grown Go-Jek have been locked in price wars in Indonesia, part of a wider fight to bring banking, e-commerce, ride-hailing, food-delivery and other services to every corner of Southeast Asia.
However, since 2018, motorcycle taxi drivers working for Grab and Go-Jek in Jakarta have held protest rallies calling for higher fares and better conditions.
Indonesia’s Ministry of Transportation plans to implement minimum and maximum tariffs for car and motor bike ride-hailing that will be “higher than Go-Jek and Grab’s current rates” and impose limits on promotional price cuts, said Budi Setyadi, director general of land transportation at the ministry.
“This is for the safety and protection of drivers,” he said.
The ministry’s Public Transportation Director Ahmad Yani said a dependency on incentive-driven payments and low fixed rates per kilometer was a safety risk as it led to drivers overworking.
Yani said Grab paid 1,200 rupiah ($0.085) per km (0.6 miles) with a focus on bonuses, while Go-Jek’s rate was 1,400 rupiah ($0.099) per km.
The officials said fixed fare ranges for motor bikes were still being finalized, but would be implemented from March.
Fixed rates for ride-hailing cars will start in June and be set at 3,500 to 6,000 rupiah ($0.43) per km in the islands of Java, Sumatra, and Bali.
The drivers were pushing for increases to a standard fare of 3,000 to 4,000 rupiah per km.
The firms said they welcomed the new rules, though they had not seen details of the motor bike regulations.
“Grab believes the government will develop the best regulatory framework and hopes that all stakeholders will be included in the process,” said the company’s Head of Public Affairs Tri Sukma Anreianno.
A Go-Jek spokesman said: “We support the government’s spirit to encourage our driver partners ... and hope the regulation will have a positive impact on the sustainability of drivers’ income ... and fair business competition.”
However, both transport officials said the companies are worried about the pending regulation since they have spent heavily on driver subsidies to slash their customer rates and build their businesses.
“Grab and Go-Jek have told me they would prefer there was no regulation,” said Yani. “Due to the competition between them ... they are scared what could happen if they don’t keep up with each other.”
Indonesia’s Supreme Court blocked a previous transport ministry attempt to fix ride-hailing rates in 2017 after drivers sued saying the rules favored the taxi firms.
Both ministry officials said the new regulations met anti-competition standards and followed extensive discussions with driver syndicates.
Grab and Go-Jek drivers welcomed the prospect of standard fares.
“I have been working for Grab since 2015. Before, I could earn 300,000 to 400,000 rupiah per day. Now, I can only get 150,000 rupiah,” said Grab motor bike chauffeur Hermansyah.
Another driver, who had worked for both companies, said neither provided much protection, leading drivers to bear operational costs. He asked not to be identified since he had a role in organizing protests.
The fixed rates will be a challenge to a business model that has depended on cheap passenger prices for growth and could undermine innovation.
“Cheap fares has been the firms’ main way to attract customers,” said Yayat Suprityatna, Urban and Transportation Observer at Trisakti University in Jakarta.
Indonesia’s plans to regulate ride-hailing rates threaten Grab, Go-Jek models
Indonesia’s plans to regulate ride-hailing rates threaten Grab, Go-Jek models
- Since 2018, motorcycle taxi drivers working for Grab and Go-Jek in Jakarta have held protest rallies calling for higher fares and better conditions
- ‘Cheap fares has been the firms’ main way to attract customers’
Saudi Arabia ascends as key destination for global talent: BCG report
RIYADH: Saudi Arabia has emerged as a key player in attracting global talent amid ongoing geopolitical shifts and financial uncertainty, moving up two spots on the list of preferred countries for workforce mobility.
The “Decoding Global Talent 2024” report by Boston Consulting Group highlights Saudi Arabia’s rise to the 26th most preferred country, underscoring the success of the Kingdom’s strategic initiatives to position itself as a global hub for professionals.
This fourth edition of the study draws insights from over 150,000 professionals across 188 nations, tracking global talent trends since 2014.
Riyadh’s rise to the 54th rank globally underscores its emergence as a hub of opportunity and progress in the eyes of global talent.
Christopher Daniel, managing director and senior partner at BCG, said: “As the global talent shortage becomes an increasingly pressing challenge for the world's foremost economies, Saudi Arabia is emerging as a pivotal player in narrowing this gap.”
He added: “With a significant proportion of respondents citing the quality of job opportunities, the attractive income, tax, and cost of living, as well as the assurance of safety, stability, and security as key reasons for choosing the Kingdom, it’s evident that Saudi Arabia’s strategic investments in its labor market are bearing fruit.”
Daniel noted that the Kingdom is leveraging labor migration to enhance its workforce, offering a secure and hospitable environment that caters to the diverse needs of international professionals.
“By fostering a job market that is attuned to the evolving aspirations of global talent while prioritizing their well-being, Saudi Arabia is positioning itself as a compelling destination for those seeking growth and fulfillment in their careers,” he said.
Furthermore, the report highlights that younger generations and individuals from rapidly expanding populations are particularly attracted to global mobility, pursuing diverse experiences and opportunities for professional growth.
With 23 percent of global professionals actively pursuing international positions and 63 percent remaining receptive, Saudi Arabia is well-positioned to capitalize on this trend.
The Kingdom offers an enriching environment for a globally oriented workforce to excel and progress in their careers, presenting an enticing option for individuals seeking both personal and professional advancement in an ever more interconnected global landscape.
Riyadh Air to expand fleet with additional aircraft orders, CEO reveals
RIYADH: Saudi Arabia’s Riyadh Air plans to bolster its aircraft lineup through additional orders, as it requires “a very large fleet” to establish itself alongside regional giants, stated the CEO.
This move comes as the Kingdom’s second flag carrier, backed by the country’s Public Investment Fund, ordered 39 Boeing 787-9 jets last year, with options for 33 more.
It also aligns well with Saudi Arabia’s goal to expand its aviation industry and attract more tourists, broadening its airline capacity beyond pilgrimage travel, which currently forms the backbone of the country’s inbound tourism.
“We need a very large fleet, we’re going to make a number of additional orders,” CEO of Riyadh Air, Tony Douglas, said in an interview with Bloomberg Television.
He added: “We will be making a narrowbody order, we’ll probably be doing another large order after that to build us up to scale.”
During the interview, Douglas, who previously led the Abu Dhabi flag carrier Etihad Airways, expressed being “very conscious” of potential delays to aircraft deliveries. This concern arises as both Boeing and Airbus SE grapple with production challenges amidst record demand and supply issues at the two plane makers.
The establishment of a second Saudi national airline alongside the existing flag carrier Saudia is part of the Kingdom’s economic diversification plan.
In November 2023, Douglas expressed confidence in the demand for travel. “We’re not well enough connected. It’s as simple as that,” he said at the time.
The new airline stands to benefit from Saudi Arabia’s rapidly growing economy and the increasing influx of tourists to the Kingdom. Riyadh Air does not intend to pursue mergers and acquisitions to fuel its growth. “No, it’s organic,” Douglas emphasized at the time.
The initial destinations will include major cities in Europe, the US East Coast, and Canada, with the inaugural flight scheduled to depart by June 2025.
By that time, Riyadh Air will have secured slots at major airports, Douglas mentioned, although hubs like London Heathrow are already operating close to capacity.
“It won’t be easy ... but we have no reason to be anything other than confident that we’ll resolve all of that,” he said at the time.
Saudi Arabia and Egypt retain top spots in MENA travel preferences: Wego study
RIYADH: Saudi Arabia and Egypt remain dominant destinations among Middle East and North Africa travelers in 2024, retaining top spots in international preferences, according to a study.
Singapore-based travel booking app Wego ranked Egypt as the top destination for tourists from the region between January and April, followed by the Kingdom, with India consistently holding the third spot since 2016.
Saudi Arabia’s second spot on the wish list is a clear indication of the Kingdom’s progress as a global tourist destination, aligning with its National Tourism Strategy aiming to attract 150 million visitors by 2030.
“We are excited to see Egypt emerge as the leading destination for travelers in the MENA region during Q1 2024. According to Wego's data, Egypt stands out as a favored choice among travelers seeking unique cultural experiences and diverse attractions,” said Mamoun Hmedan, chief business officer at Wego.
He added: “Meanwhile, the United Kingdom retains its position as the preferred European destination for Middle Eastern travelers.”
Among Middle East destinations, the top three — Egypt, Saudi Arabia, and UAE —maintained their positions from 2023. Egypt and the Kingdom, in particular, have consistently held the top two spots since Wego began tracking customer trends over a decade ago.
The study utilized traveler searches and hotel booking data from its website as the foundation for its findings.
The report further revealed that the UAE ranked as the fourth favorite destination, followed by Pakistan, Kuwait, and Turkiye.
Meanwhile, China dropped one spot, reaching the 27th top destination among MENA travelers.
The UK remains the top European destination from the Middle East, holding the first spot for 10 of the last 11 years, briefly overtaken during the pandemic. Italy has notably surged from fourth to second.
Italy, a top global tourist spot, consistently ranks in the top ten European destinations for Middle East travelers.
This year marks Italy’s debut in the top three. Joint investments between Saudi Arabia and Italy in late 2023, along with direct flights by ITA Airways to Riyadh and Jeddah, signify growing ties.
Countries farther from the Gulf region, such as Morocco, Indonesia, and the US experienced the most decline among top destinations.
This trend continued in 2024, with Malaysia, the Philippines, and the US dropping out of the global top 10, while Kuwait, Pakistan, and Jordan, which entered the top ten last year, remain preferred destinations for MENA travelers.
Closing Bell: TASI edges down to close at 12,372 points
RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Monday, losing 0.61 points, to close at 12,372.50.
The total trading turnover of the benchmark index was SR7.36 billion ($1.96 billion) as 116 stocks advanced, while 110 retreated.
Similarly, the MSCI Tadawul Index decreased by 2.63 points, or 0.17 percent, to close at 1,549.13.
On the other hand, the parallel market, Nomu, increased, gaining 0.85 points, to close at 26,791. This comes as 20 stocks advanced while as many as 39 retreated.
The best-performing stock was Bupa Arabia for Cooperative Insurance Co. as its share price surged by 10 percent to SR275.
Other top performers included the Mediterranean and Gulf Insurance and Reinsurance Co. and Al-Rajhi Company for Cooperative Insurance, whose share prices soared by 9.97 percent and 9.93 percent, to stand at SR33.10 and SR148.40 respectively.
The worst performer was Arabian Internet and Communications Services Co., whose share price dropped by 4.46 percent to SR334.4.
Saudi Cable Co. as well as Gulf Insurance Group, did not perform well, as their share prices dropped by 3.55 percent and 3.01 percent to stand at SR76 and SR33.85, respectively.
On the announcements front, Bupa Arabia for Cooperative Insurance Co’s profits surged to SR359 million, during the first quarter of 2024, up 91 percent from SR189 million in the same quarter of the previous year.
According to Al-Ekhbariya, net investment income reached SR158 million in the first quarter compared to SR102 million in the same quarter of the previous year, marking a 54 percent increase.
Insurance revenues for the current quarter amounted to SR4.37 million, compared to SR3.75 million in the same quarter of the previous year, reflecting a significant increase of 16.63 percent.
This growth is primarily attributed to operational expansion and an increase in the number of insured individuals, as reported by the channel.
Al-Rajhi Company for Cooperative Insurance also announced its interim financial results for the period ending March 31 with revenues increasing to SR1.4 million from to SR865,298 during the similar quarter of the previous year.
This marked an increase of 50.6 percent attributed the increase to a growth in overall business volume, according to a Tadawul statement.
Similarly, net profit after zakat attributable to shareholders for the current quarter amounted to SR111,376, compared to SR61,282 during the similar quarter in previous year, an increase of 81.7 percent.
According to the company, the improvement stemmed from increased net insurance service results, rising to SR113,229 from SR97,616 in the previous year, a 16 percent surge due to business growth.
Pakistan ‘high priority' economic opportunity for us, Saudi top minister says in Islamabad
- 50-member Saudi delegation with representatives from 30 companies in Pakistan for investment conference
- 125 Pakistani companies negotiating with Saudi companies visiting Pakistan, petroleum minister says
ISLAMABAD: Pakistan is a “high-priority economic investment and business opportunity” for Saudi Arabia, the Kingdom’s Assistant Minister of Investment Ibrahim Al-Mubarak said on Monday, as a two-day Pak-Saudi investment conference kicked off in Islamabad with a focus on business-to-business engagements.
A 50-member delegation led by Al-Mubarak arrived in Pakistan on Sunday, comprising some 30 Saudi companies from the fields of IT, telecoms, energy, aviation, construction, mining exploration, agriculture and human resource development.
“To the Saudi government and Saudi companies, Pakistan is considered a high-priority economic investment and business opportunity,” Al-Mubarak said as he addressed the investment summit.
“We believe in the great potential of Pakistan's economy, demographics and talent as well as location and natural resources.”
Al-Mubarak said this was his second visit to Pakistan in two weeks and many influential leaders from globally renowned Saudi companies were part of his delegation.
“Today, we want to connect you [Pakistan] all to Saudi companies who desire to continue building their international presence, for Saudi Arabia's ambitions do not stop at our borders and we would like to see Pakistan as one of our leading international partners,” the Saudi official added.
“So, this gathering provides a wonderful opportunity for them [Saudi companies] to develop a deeper understanding of the great opportunities available for investment in Pakistan and to learn about related regulations, requirements, and incentives.”
Addressing a press conference in Islamabad, Petroleum Minister Dr Musadik Malik said 125 Pakistani companies were negotiating with the Saudi companies who were visiting Pakistan.
“First, there were government-to-government agreements during the visit of the Saudi foreign minister [last month] and now there will be business-to-business agreements,” he said.
“To facilitate the visiting Saudi companies, the Pakistani commerce ministry has affiliated one focal person with each Saudi company.”
Minister for Commerce Jam Kamal Khan said Pakistani and Saudi companies were discussing joint ventures and collaboration in diverse sectors.
“This delegation includes high officials of more than 32 Saudi companies … Saudi businessmen will invest in Pakistan in different stages,” Khan said at the press conference.
“Pakistani companies are present here, in the energy sector, in the food sector, in the construction sector, in the renewable section, in the ports and shipping section, and the IT services and general services.”
He said the visit by the Saudi delegation was “just the beginning” and now a Pakistani delegation would visit the Kingdom “to move forward towards the implementation phase.”
INVESTMENT PUSH
Pakistan and Saudi Arabia have been closely working in recent weeks to increase bilateral trade and investment deals, with Crown Prince Mohammed bin Salman last month reaffirming the Kingdom’s commitment to expedite an investment package of $5 billion.
The Saudi business delegation’s visit comes on the heels of one by Sharif to Riyadh from Apr. 27-30 to attend a special two-day meeting of the World Economic Forum.
On the sidelines of the WEF conference, the Pakistani PM met and discussed bilateral investment and economic partnerships with the crown prince and the Saudi ministers of finance, industries, investment, energy, climate, and economy and planning, the adviser of the Saudi-Pakistan Supreme Coordination Council and the presidents of the Saudi central bank and Islamic Development Bank.
This was Sharif’s second meeting with the crown prince in a month. Before that he also met him when he traveled to the Kingdom on April 6-8. The Saudi foreign minister was also in Pakistan last month, a trip during which Pakistan pitched projects worth at least $20 billion to Riyadh.
Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as a top source of remittances to the cash-strapped South Asian country. During the first half of the current financial year, bilateral trade between Pakistan and Saudi Arabia was recorded at $2.482 billion, with Pakistan’s exports of $262.58 million and Saudi exports of $2.219 billion.
Saudi Arabia has often come to Pakistan’s aid in the past, regularly providing it oil on deferred payments and offering direct financial support to help stabilize its economy and shore up forex reserves.
As things stand, Pakistan desperately needs to shore up its foreign reserves and is in talks with the International Monetary Fund (IMF) for a new bailout deal, for which it needs to signal that it can continue to meet requirements for foreign financing which has been a key demand in previous loan packages.
Last year Pakistan set up the Special Investment Facilitation Council, a body consisting of Pakistani civilian and military leaders and specially tasked to promote investment in Pakistan. The council is so far focusing on investments in the energy, agriculture, mining, information technology and aviation sectors and specifically targeting Gulf nations.
