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GoTo On-Demand Services Near Profitability After Decade of Operations
Cost-Cutting While Expanding in Smaller Indonesian Cities
Anuj Kumar Verma
December 04, 2023
• After over a decade of operations, GoTo's on-demand segment is nearing profitability for positive Q4 EBITDA.
• GoTo narrowed losses 95% in Q3 to $3.1M via cheaper options and proprietary tech to reduce reliance on rider incentives.
• The company is now expanding in overlooked smaller Indonesian cities to drive growth.
From Start to Sustainable
After over 10 years in business, GoTo Group’s on-demand segment is nearing profitability, with mobility and food delivery units on track to hit positive EBITDA in Q4.
The segment narrowed losses 95% in Q3 to just $3.1 million. Initiatives like cheaper GoCar options and proprietary tech are reducing reliance on rider incentives and subsidies.
"We’re strategically managing and reducing our cost base while defending our market-leading position," said transport chief Shobhit Singhal.
A Decade in the Making
Regional rival Grab turned profitable faster, but Gojek claims expanded services tailored for value-conscious riders can unlock 50-60% more users without discounts.
Beyond subsidies, GoTo cut Q3 marketing spending by 36% overall. Aligning with group aims, Gojek hopes to cement adjusted profitability this quarter.
From Inception to the Verge of Profitability
The targets come after GoTo slashed 1,900 jobs amid cancelled IPO plans. Now, the company is expanding in Indonesia's overlooked smaller cities - mirroring moves by other units to penetrate overlooked growth avenues.
If the on-demand vertical sustains momentum, it can spearhead a comeback story for this diversified, earnings-hungry Indonesian giant mobi.
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