Gojek CEO Andre Soelistyo told employees during an internal town hall meeting late Thursday that the company’s transportation business has been profitable for “a few months.” He did not provide more details. It’s also not clear if he was referring to gross or net profitability.
Gojek’s overall business, which includes food delivery and a payment gateway, remains unprofitable, Soelistyo noted. The company’s ex-CEO, Nadiem Makarim, said in late 2018 that Gojek is “extremely close” to reaching profitability in all its segments, except transportation.
Chief rival Grab, meanwhile, has been saying that it’s “profitable in mature markets for its mature verticals.”
During the town hall, Soelistyo expressed that he’s worried about how Covid-19 might impact consumer demand down the road. He also denied a recent report by DealStreetAsia that says Gojek has undertaken a wave of layoffs affecting over 100 mid- and lower-level employees. The Indonesian unicorn did not immediately reply to the publication on the matter.
However, some companies reduce their headcount by nudging people to resign – either by giving them an unattractive option of relocating to another city or country for another job within the company, changing or reducing their job scope, or cutting their pay.
Gojek did not respond to Tech in Asia’s request for comment.
In addition, Soelistyo said that news about merger talks between Grab and Gojek, which was first reported by the The Information, is false.
“There are no plans for any sort of merger, and recent media reports regarding discussions of this nature are not accurate,” a Gojek representative told Tech in Asia in February.
In December last year, Gojek shut down its GoLife services, which include on-demand services like cleaning and laundry. It’s unclear if the move involved layoffs.
More recently, the company raised US$1.2 billion in fresh funding amid a worsening economy, giving it ammunition to fight Grab.
Taken at face value, the news that Gojek’s transportation arm is profitable will give it – and even Grab – a boost. Makarim told the Nikkei Asian Review that an “optimistic scenario” would be for Gojek to turn its ride-hailing business profitable.
Indeed, the rivals have been touting their food delivery and fintech businesses over ride-hailing, given the common view that it’s easier to turn a profit on the non-transportation arms.
A Goldman Sachs analysis seen by Tech in Asia says that the super apps will likely draw profitability from their financial arms, with transportation likely to lose money in the foreseeable future.