Katie Williams, an Australian tourist in her mid-30s, recently visited Bali's Canggu area with her parents. She booked a Grab ride for the family trip, but right after the driver accepted the request, she received a message: "I can't go there. It's too dangerous. You come find me." Williams pleaded that her elderly parents could not walk far in the heat, but after three consecutive cancellations, she ended up paying a local taxi driver double the app fare. Her hotel was located in an unofficial "no-go zone" for ride-hailing app drivers.
An unexpected "taxi war" is unfolding in Bali, the Indonesian island known as the "Island of the Gods." A conflict between ride-hailing apps such as Grab and Gojek and local taxi drivers is increasingly hurting tourists. According to the South China Morning Post (SCMP) on Tuesday, the number of tourists falling victim to ride refusals and inflated fares is rising sharply.
The roots of the conflict lie in Bali's distinctive village community system known as the banjar. Unlike other parts of Indonesia, every village in Bali is subdivided into multiple banjars. Run directly by residents, these communities handle everything from road construction to religious ceremonies and dispute mediation. They even set taxi fares within their own territories.
The problem is that banjar fares are always higher than those of ride-hailing apps and are non-negotiable. They are typically charged on a round-trip basis. "I take 70% of the income, and the rest goes to the banjar," one local driver said. "App drivers are opportunists who don't contribute to the community while driving down market prices."
The price gap is significant. For the 95-kilometer route from Denpasar International Airport to Singaraja, Bali's second-largest city in the north, local drivers charge 800,000 to 1 million rupiah (about 68,000 to 85,000 won). The same distance booked through a ride-hailing app costs around 550,000 to 600,000 rupiah (about 46,000 to 50,000 won).
The conflict has spilled over into violence. According to Indonesian media outlet Detik, a local motorcycle taxi driver assaulted an app driver who picked up a customer in front of a restaurant. In the popular tourist area of Canggu, a local driver was arrested by police on charges of stopping tourists traveling by app-based vehicle and extorting 150,000 rupiah (about 13,000 won) from them. Such incidents have led tourists to coin the term "Bali taxi mafia." One tourist group reported that drunken local drivers had "threatened to kill them if they didn't use their service."
The fallout from the U.S.-Iran war has worsened the financial hardship of local drivers as tourist numbers in Bali have declined. With the island heavily dependent on tourism, it is losing roughly 800 tourists per day. Local drivers are charging 10 to 20 times more than Grab fares. The price is, quite literally, whatever they say it is.
Road control is another issue. More than half of Bali's roads are controlled by banjars. Hotels need to maintain good relations with local communities to attract guests. It is not easy for them to push back against local drivers who charge their guests inflated fares.
Grab and Gojek drivers are also at odds with their platforms. Across Indonesia, including Bali, they have staged protests against platform commissions of up to 20%, demanding a cap of 10%. Last month, President Prabowo Subianto announced a plan to cap platform commissions at 8% and to require platforms to provide injury and health insurance for drivers.
Some local drivers attach Grab or Gojek logos to their vehicles and head to airport arrival areas. They quote the app fare and pocket the entire amount themselves — a workaround. But this is no solution. In South Korea as well, call taxis disappeared after the rise of ride-hailing apps such as Kakao Mobility and TMAP Taxi. There is even speculation that Uber may not only roll out a premium van service but could also pursue an acquisition of Kakao Mobility. It would echo the past sale of Baedal Minjok to Germany's Delivery Hero. In Korea, the principle of "market autonomy" applies. In a taxi market where large corporations compete, the only way to survive is through price competitiveness.
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