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There is a war being waged for Jakarta's nine million commuters, and the country's largest traditional taxi company just made a huge play to counter the rising threat from the ride-hailing competition.

Blue Bird, which runs a fleet of 23,000 taxis across the country, announced on Thursday it was teaming up with another big traditional player, Go-Jek.

Go-Jek, which dominates the motorcycle taxi market, has expanded in recent years to cars, under its Go-car feature.

The move is a strategic one, aimed at tackling a big announcement also made on Thursday by Grab, the reigning ride-hailing app.

Grab offers four services in Indonesia: ride-sharing, taxi cabs, motorbike taxis and delivery services -- and traditional operators are certainly feeling the heat.

The new tie-up between Blue Bird and Go-car means customers will be able to access Blue Bird's extensive fleet when they use the Go-car app, greatly increasing the chances of catching a ride.

The two companies have promised to keep rides at the same rate across providers.

For now, the feature is limited to Jakarta.

Go-Jek first announced partnership plans with Blue Bird less than a year ago, but it's only now that a collaboration has been officially launched.

Grab launches R&D centre in Jakarta

Also on Thursday, Grab announced plans to invest $700 million over the next four years into an R&D centre that will include a local engineering team to adapt future features for Indonesians.

Indonesia is the biggest market for the Singapore-headquartered firm, which is now valued at some $3 billion.

Grab noted in a statement that its GrabCar ride-sharing service and GrabBike motorcycle taxi usage have grown sixfold in the last year.

Grab drivers have also been on the receiving end of anger by the traditional taxi community, which has held large-scale strikes in the capital against new ride-hailing apps.

Last year in March, a mob of 10,000 taxi drivers parked their cars in protest along central Jakarta's main roadways, paralysing traffic downtown.

With these new developments, it appears the war just got stoked a little more.

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