Grab Holdings’ profitability could take a hit this year if Indonesia goes ahead with a proposed regulatory change to lower the cap on commissions that the ride-hailing group charges its drivers, according to analysts.

Indonesian authorities are finalizing a new regulation on ride-hailing services, intended to protect drivers’ income and welfare. Local media has reported that the new rules would reduce the ceiling on ride-hailing platforms’ commissions from the current 20% to 10%. This means operators like Grab would collect lower fees from their drivers.

On January 19, minister of state secretary Prasetyo Hadi confirmed that the government is looking to lower the cap, adding that detailed figures are still being calculated. “That’s one of the agreements we’re currently working on,” he said when asked about the reported reduction to 10%. “It’s not far from that.”

“If a (commission) cap is implemented, we believe it will negatively impact the ride-hailing sector in Indonesia,” Jacquelyn Yow, an analyst at CGS International Securities, wrote in a report.

She sees Grab facing a potential 5–10% downside risk to its EBITDA (earnings before interest, taxes, depreciation and amortization) in 2026.

Reflecting such concerns, Nasdaq-listed Grab’s shares dropped 5% on January 15, extending a downward trend that has persisted for several weeks.

Grab operates in eight countries across Southeast Asia. Indonesia accounted for 23% of its total revenue in 2024, according to its annual report, making it the platform’s second-largest market, after Malaysia, and ahead of Singapore and the Philippines.

With the regulatory change looming, Grab is moving to give drivers some benefits. On January 13, its Indonesian unit announced a welfare program worth IDR 100 billion (USD 5.9 million) for what it calls its driver partners, covering employment insurance, holiday bonuses, and skill development initiatives.

Grab did not comment on the potential impact on its business as the regulation has not been finalized.

After years of losses, Grab’s profitability has improved thanks to robust demand for its ride-hailing, delivery, and financial services. It marked five consecutive quarters of positive net income through the July-September period.

The company has projected annual revenue of USD 3.38–3.40 billion for 2025, 21–22% more than the previous year.

The fresh headwinds come amid resurgent speculation over a merger with Indonesian rival GoTo Group, which operates the Gojek superapp. Indonesian authorities have confirmed the ongoing talks, but a Grab executive downplayed the speculation last November.

Whether the talks lead to a merger remains to be seen, but they have drawn concerns about monopoly power: If the deal goes through, the resultant entity would control more than 90% of the Indonesian market.

“We believe this corporate action has the potential to harm online motorcycle taxi drivers,” said Taha Syafariel, chairman of Indonesia’s Online Driver Association.

Grab will release its full-year earnings for 2025 on February 11, when executives could brief reporters on the company’s outlook for the rest of this year.

Meanwhile, Grab has actively invested in new technologies, and in November, CEO Anthony Tan described potential future services as an “exciting frontier.”

This month, Grab launched a drone delivery pilot program in Singapore in partnership with Singapore Technologies Engineering. The three-month trial will test unmanned deliveries of food and other items as Grab tries to dodge rising labor costs.

Additionally, Grab recently announced the acquisition of Infermove, a China-based artificial intelligence and robotics company specializing in automated delivery solutions, for an undisclosed sum.

Grab has also partnered with Chinese autonomous driving company WeRide to launch an autonomous passenger service trial in Singapore.

“AV (autonomous vehicle) technology has progressed exponentially since I first took a few AV rides almost ten years ago,” CEO Tan posted on LinkedIn earlier this month after going for a test ride in a vehicle operated under the WeRide partnership.

“We’ve driven over 10,000 km autonomously without incident,” he wrote, “and every single day, our AVs continue to be tuned with new data.”

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.