Indonesia's GoTo gives IPO shares to 600,000 drivers in regional first

[SINGAPORE] GoTo will give away thousands of shares to each of 600,000 drivers as part of its US$1.1 billion Indonesian initial public offering (IPO), setting a precedent for South-east Asia's sharing economy.

Drivers who registered with the ride-hailing and delivery app between 2010 and 2016 will get 4,000 GoTo shares, equivalent to US$94 based on the IPO price of 338 rupiah. Those who registered from 2017 to February will get 1,000 shares, part of a total pool of more than US$20 million allocated for drivers, according to a statement on Monday (Apr 4).

GoTo, formed through the merger of Gojek with e-commerce pioneer Tokopedia, raised US$1.1 billion in one of the world's biggest stock debuts this year and is slated to list in Jakarta on Apr 11. While the giveaway represents a token amount, GoTo becomes the first major sharing-economy giant in South-east Asia to include part-time gig workers in its own IPO windfall.

"It's an acknowledgment that our driver-partners are part of our success," chief executive officer Andre Soelistyo said in an interview. "This is something we've wanted to do since the beginning."

The mobile boom has minted an unprecedented number of billionaires from Alibaba Group Holding's Jack Ma to Sea founder Forrest Li. Yet app-based gig-economy companies are typically built on the backs of low-wage contract workers, who work long hours but continue to lack employee benefits like healthcare or a safety net. Their plight has gained regulatory and public attention in recent years, particularly during the pandemic when Internet platforms flourished but social inequities widened. Singapore and other governments around the world are considering legislative changes to protect gig-economy workers.

Uber Technologies and Lyft, which went public in 2019, gave frequent drivers cash to buy stock in the US But the practice in Asia is rare.

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South Korean e-commerce firm Coupang promised staff and frontline workers about US$90 million worth of restricted stock. Goto's rival Grab Holdings - which went public via a merger with a blank-cheque company in December - handed out rewards equivalent to US$1.4 million to drivers and merchant partners in Indonesia ahead of its listing.

GoTo's drivers, who aren't classified as employees but independent contractors, may choose to hold the stocks or cash out after an initial 8-month lock-up period, according to the company's prospectus.

The "Gotong Royong" share grant to drivers is part of a broader programme that includes merchants, consumers and employees. Loyal merchants and consumers of Gojek and Tokopedia got priority access when ordering GoTo shares during the book-building period. All full-time employees have received equity under the programme, according to Soelistyo. The company had a total of 8,540 staff at the end of July.

The GoTo Peopleverse Fund, formed to allocate stock options to employees over coming years, will own about 9.03 per cent of the company after its listing, surpassing the stakes of the SoftBank Vision Fund and Alibaba, according to the IPO prospectus. Soelistyo will have a roughly 0.84 per cent stake in GoTo, while Gojek co-founder Kevin Aluwi will hold 0.77 per cent and Tokopedia co-founder William Tanuwijaya, 1.77 per cent.

The company said it's also set aside more than 9.35 billion shares, valued at roughly US$216 million, as an endowment fund to support social and environmental initiatives, reflecting a global trend among tech giants. Airbnb created an endowment pool to support its hosts with 9.2 million shares, while Grab announced its own fund last April with an initial capital of US$275 million to support its partners.

GoTo is tapping the public market as tech firms are getting battered by a far-reaching equities sell-off. The loss-making company priced 40.6 billion primary shares in a downsized IPO last week. That represents a projected market value of about US$28 billion after the offering, compared with the US$35 billion to US$40 billion GoTo was said to be targeting last year.

"Although the Indonesian stock exchange might not have as deep a pool of capital as the United States or an investor base that understands tech as well, GoTo has built the most complete tech ecosystem in the country and a huge local fan base," said Joel Shen, head of Asia technology at global law firm Withers. "That could help to drum up some enthusiasm from retail investors." BLOOMBERG