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Anthony Tan, group chief executive and co-founder of ride-hailing service Grab said his company will be in Indonesia for the long term to provide multi-platform services to help solve the country’s perennial problems related to inadequate transportation infrastructure.

Grab operates in 30 cities in six countries in the region – Indonesia, Singapore, the Philippines, Malaysia, Thailand and Vietnam. The company competes against United States-based ride-hailing service Uber and local app-based service Go-Jek to provide services using private cars, taxis and motorcycle taxis.

Sustainability means removing subsidies

Indonesian drivers who are partners of Grab, like many other ride-hailing services, receive subsidies from their companies to ensure that they earn enough money, while also keeping customers happy with affordable fares. But Tan said he fully realizes that Grab must gradually remove the subsidies.

“How do you build a sustainable business model? The only way [to operate] without subsidies is to ensure [there are] many jobs for drivers,” said Tan, who prior to founding Grab, was the head of supply chain and marketing at Malaysia-listed automotive giant of Tan Chong Group. Tan appeared happy when he explained that his company’s business model did not involve burning huge amounts of cash to attract regular users.

“How much cash someone can burn is not a good relevant example to building a long-term solution. We have to solve a long-term problem,” – Grab Co-Founder

GrabBike in particular, he said, has seen 300%growth in its business since January, despite a 50% cut in its fare subsidies.

The key aspects of the business are technology and people

In his illustration of how he prioritizes Grab’s spending, he said, “if we have $100, we have to put $90 in IT,” referring to Grab’s back-end technology business that includes its consumer application team, application design team, database team, engineering and infrastructure engineering. He also mentioned Grab’s partnership with the World Bank to provide real-time traffic data to improve the startup’s mapping technology.

Tan said Grab is also not forgetting about security aspects. He was proud to reveal that he snatched his IT team from Palantir Technologies, an American software and services firm, which has served clients, including the US government and the Central Intelligence Agency (CIA), National Security Agency (NSA) and Federal Bureau of Investigation (FBI).

Grab is not shaken by regulatory challenges

Offering what he calls “constructive disruptive” technology, Tan is fully aware that Grab must maintain a good relationship with the government and calm discontent among traditional players in the industry who feel that their businesses are under threat. Protests have occurred in Indonesia, with people employed in the taxi industry, and those working as traditional motorcycle taxi, or ojek, drivers, accusing the company of introducing unfair business practices.

The deadline for this controversial regulation, expected to discourage driver partners from participating in the business, is Oct. 31 this year. When asked about the regulatory hurdles, Tan was largely unshaken by the challenge. “In the end, I believe the Indonesian government wants the best for the people of Indonesia. In the higher principle, I believe you are aligned, it is no longer me against you […] we both want to help Indonesian people have a much more efficient transportation system,” he said.

A version of this interview appeared in Jakarta Globe on July 26. Find the full version here