UPDATE 4-Malaysia OKs Gojek's entry, ride-hailing firm says talks still on

* Bike-hailing firms to start 6-month pilot project
* Bike-hailing to face similar regulations as ride-hailing
* Government aims to make bike-hailing key connectivity
option
* Gojek says yet to determine manner, timing of Malaysia
entry

(Adds updated comments from Gojek)
By Joseph Sipalan and Ed Davies
KUALA LUMPUR, Nov 5 (Reuters) - Malaysia will allow
motorcycle-hailing firms such as Indonesia's Gojek to start
limited operations from January, a minister said on Tuesday,
which could help end Grab's near-monopoly in Malaysia's broader
ride-hailing market.
Gojek - whose investors include Alphabet's Google GOOGL.O
and Chinese tech companies Tencent 0700.HK and JD.com JD.O -
told Reuters it has yet to decide how or when it will enter the
Malaysian market, pending clarity on the regulatory framework
being drafted by the country's transport ministry.
"We will now reach out to the ministry to understand the
framework and to work through the detail of how we might
approach a launch (in) Malaysia," a Gojek spokesman said.
"Ultimately, we want to support governments as they develop
the digital economy in ways that are inclusive, foster
innovation and drive competition."
Malaysia's ride-hailing segment is expected to earn revenue
of $558 million this year, growing at about 16% annually to hit
$1 billion by 2023, according to German database company
Statista.
At 12.7%, ride-hailing user-penetration in Malaysia,
Southeast Asia's third-biggest economy with 32 million people,
is nearly double that of the region overall.
Malaysian Transport Minister Anthony Loke Siew Fook told
parliament firms such as Gojek and local start-up Dego Ride
would be able to start operating based on a proof-of-concept
basis, to measure demand for the service over six months.
"Bike-hailing will be an important component in providing a
comprehensive public transport system, as a mode for first- and
last-mile connectivity," Loke said.
The pilot project would be initially limited to the Klang
Valley, Malaysia's most developed region and where the capital
Kuala Lumpur is located.
The six-month programme would allow the government and
participating firms to gather data and evaluate demand, while
the government worked on drafting legislation to govern
bike-hailing.
"Bike-hailing will be subject to similar regulations as laid
out for e-hailing," the minister said, referring to existing
ride-hailing operations by companies such as Grab.
Gojek's co-chief executive, Andre Soelistyo, told reporters
on Saturday that the company was preparing expansion into
Malaysia and the Philippines. Gojek's Malaysia entry would likely pose the biggest
challenge to Grab, which dominates its e-hailing market after it
bought Uber Technology Inc's UBER.N operations in Southeast
Asia last year.
Malaysia last month proposed a $20.5 million fine for Grab,
which is backed by Japan's SoftBank 9984.T , for allegedly
violating competition law by imposing restrictive clauses on its
drivers. "Bring it on!" Grab Malaysia said on Twitter after Loke's
announcement.
"It is indeed healthy competition."