On a balmy night in Canggu, a resort village in the south of Bali, my wife receives a call from an Uber driver, his voice tense and insistent. He asks for our destination, violating Uber’s rule against drivers cherry-picking destinations to their liking and rejecting the rest. Hesitant to aggravate the only driver to accept our request, we relent. “In Tibubeneng,” my wife answers. But the Uber driver calls the deal off, saying, “I know that area, they beat up online drivers there. Dangerous.” After several more failed attempts with Uber, Grab and GoCar, we wearily look around the neighborhood, the empty streets reminding us that except for the rare (and occupied) taxis passing by, Bali has no comprehensive public transport system.
Just 4km away from Canggu lies our destination, Tibubeneng—an area of tourist inns crowned by intricate spires and surrounded by lush paddy fields, exuding Bali’s famed melding of elegance and rustic simplicity. But even the allure of Tibubeneng cannot hide the signs of conflict between technology and tradition. On walls, alleys and pavements, driver associations—mainly composed of taxi drivers—have put up tarpaulins and plastic signage forbidding ride-hailing app drivers from operating and warning passengers not to use them. For good measure, the signage depicts pictures of Grab and Uber cars defaced by bold red marks, hinting at the potential violence that could arise from defying these “prohibitions”. In Bali, first blood was drawn in 2017, when several men dragged an Uber driver from his car, beat him to a pulp and wrecked his car with rocks and wooden beams.
This conflict in Bali is not an isolated case. Starting with the launch of MyTeksi (now Grab) in Malaysia in 2012 and the arrival of Uber in 2013, the entry of ride-hailing apps and online drivers across many Southeast Asian cities brought competitive pressure to drivers of conventional transport such as taxi cabs and two-wheeled taxis. The stakes are high.
Out of 630 million people in Southeast Asia, 300 million (47%) live in cities and require urban transport services. A sizeable portion of these urban commuters are adopting ride-hailing apps, rather than relying purely on conventional transport. According to data from the Boston Consulting Group, the percentage of urban commuters using ride-hailing apps ranges from around one in 14 commuters in Bangkok, to nearly one in five in Manila. In most major Southeast Asian cities, such as Hanoi, Jakarta, Singapore, and Kuala Lumpur, at least one in 10 commuters uses ride-hailing apps. Consequently, the increasing market share of ride-hailing apps has sparked resentment among conventional drivers.
Pushing back against ride-hailing apps
The opposition of conventional drivers to ride-hailing apps manifests in two ways. First, they engage in the political process through lobbying, strikes and peaceful protests to pressure their governments to regulate ride-hailing apps exactly like conventional transport; establish regulations that curtail the success of ride-hailing apps; or ban them outright. Faced with the unprecedented complexities of ride-hailing technology, governments tend to vacillate, enact measures that do not satisfy conventional drivers, or reverse policies. For example, Indonesia’s Transport Ministry issued a circular banning ride-hailing apps, but just a day later President Joko “Jokowi” Widodo overruled the ministry out of concern for the welfare of Indonesian commuters, leading to a sudden policy reversal.
Thus, the second form of opposition comes into play: frustrated with the lack of official support, conventional drivers take matters in their own hands through aggressive protests, violence, intimidation and the imposition of rules in their local turf to undermine online drivers.
Unfortunately, these rough, informal methods sometimes lead to violent conflict with online drivers. Street protests have deteriorated into chaos. In 2016, protesters against ride-hailing apps in Jakarta blocked major roads, brought the megacity to a standstill, set tires on fire and smashed transport vehicles whose drivers refused to join the protest. Conventional drivers and their ride-hailing app rivals fought with steel pipes and hurled rocks at each other, while isolated online drivers caught by protesters were mobbed and beaten. Similar violent protests have occurred in Bangkok and Surabaya.
Aside from unruly street protests, violence also manifests in other ways. In Kuala Lumpur, taxi drivers have mobilised to carry out vigilante “arrests” of online drivers, manhandling them before turning them over to police for alleged violations of transport laws—an approach denounced even by Malaysian authorities.
To avoid the attention of violent groups opposed to ride-hailing apps, many GoJek drivers in Bandung, Indonesia, do not wear their GoJek uniforms, strip their motorcycles of markings that link them to GoJek, and avoid parking in open areas or public spaces.Southeast Asia Globe reports that in Bali, online drivers live in fear of local gangs who take up the dual roles of legitimate neighbourhood patrolling and thuggery. Ojek (two-wheeled motorcycle) drivers in Ciganitri-Bandung are known for isolating and intimidating lone suspected online drivers in groups and warning passengers in their area to stop using transport apps. It is likely that more cases of violent encounters between online and conventional drivers go unreported. By contrast, it is worth noting that there is little to no evidence of online drivers initiating violence against conventional drivers.
Thus, the opposition of conventional drivers simultaneously has formal and informal aspects: they try to influence political channels through lobbying and peaceful protests, but also engage in rough tactics on the streets. It is worth examining the principles that, in their view, entitle them to government support and justify the use of anti-social behaviour when government policies and enforcement do not go their way.
Justifying the opposition to online drivers
I identify four explanations offered by conventional drivers to justify opposition toward online drivers and ride-hailing apps: transport laws, price, livelihood, and culture and tradition. I also ask, to what extent are these justifications credible?
1. Upholding Transport Laws
In the eyes of many conventional drivers, online drivers must be suppressed because they are not covered by the law, and therefore are extralegal. They operate without official permits for commercial activities requiring government regulation and therefore violate the law.
The strength of this reasoning across Southeast Asia is not absolute, but a spectrum. It’s weaker in cities where informal transport has been allowed to flourish. For instance, ojeks in Indonesia operate informally without official recognition and permits, but they have been tolerated by the Indonesian Government and law enforcement for decades. It is not unreasonable to say that ojek associations using this justification are denying GoJek drivers the same tolerance afforded to them. Informal drivers are themselves extralegal. So any alliance with participation from these informal drivers is being hypocritical when they demand the government to persecute online drivers on account of the latter’s extralegal status.
Conventional drivers also complain that ride-hailing apps enjoy unfair competitive advantages through illegal means. They reason that, unlike taxis and conventional public transport, online drivers unfairly operate without being subjected to government controls which involve costly administrative fees, stringent quality control on both vehicle and driver, and safety and insurance requirements. Worse, ride-hailing app drivers, being out of the law’s coverage, are said to not always pay taxes. Thus, incumbent transport groups feel a great injustice.
Discrediting online drivers because of their extralegal status and legal violations rings hollow when both government and the public are aware that conventional drivers themselves flout the rules
However, these complaints are only credible to the extent that conventional drivers meet the standards that they hold ride-hailing apps to. Anything short of this exposes conventional drivers to accusations of hypocrisy.
To be fair, there may be cities where taxis have a good local reputation. Unfortunately, in many Southeast Asian cities, it is hard to claim that taxis and other public transport vehicles fastidiously follow rules that underpin “fair competition”. Many taxis and the like are dilapidated, raising doubts about the quality controls supposedly observed by their drivers. Taxi drivers often have a reputation for driving dangerously, tampering meters, behaving unprofessionally, asking for extra fares and blatantly cherry-picking destinations in violation of transport laws. Given that taxis in many Southeast Asian cities do not issue receipts (most likely breaking local transport and taxation laws), it is hard to say whether they pay the correct taxes. Therefore, discrediting online drivers because of their extralegal status and legal violations rings hollow when both government and the public are aware that conventional drivers themselves flout the rules.
Conventional drivers claim that their inability to compete on price with ride-hailing apps reduces their market share. The fact that ride-hailing apps can charge such low prices breeds feelings of injustice among conventional drivers, which motivates their efforts to oust ride-hailing apps.
As a strategy to capture the market, ride-hailing companies subsidise the fares to attract riders and compensate the online drivers. For example, in 2015, during Ramadan, the Muslim fasting month, GoJek initiated a promotion in Indonesia which designated a flat fare of only IDR10,000 (USD0.70) for any destination within a 25km radius. A conventional ojek fare usually starts at IDR5,000 for a short trip and may rise to around IDR40,000 for rides with distance of 25km, making ojeks less attractive to riders. Worse, when a big ride-hailing app like GoJek employs such promotions, other big players such as Grab and Uber join in. A price war among giants ensues, and conventional drivers lose out further.
The inability to compete on price can even determine whether conventional drivers sit on the fence or join the fight against online drivers. Consider how other informal modes of transport such as Bandung’s multi-passenger minivans, called angkot, are not active in the war against online drivers. Research from Telkom University in Indonesia suggests that some angkot drivers do not feel threatened by online drivers because they can still compete on price and protect their market share and incomes. In a telling statement, one angkot driver confides, “The price for using an angkot is still cheaper than GoJek, and aside from that, it is not easy to book a GoJek driver. It is a bit complicated… so no, I am not worried with GoJek in Bandung. Come to think of it, to me, traditional ojek and GoJek drivers are the same. Two-wheeled transportation has been around way before GoJek arrived.”
Conventional drivers are indeed correct that price wars put them at a commercial disadvantage. However, price wars and promotions do not happen all the time. According to my research, which began in 2016 and has been confirmed by other sources, in many cases ride-hailing apps remain more expensive than conventional modes of transport, especially when surge-pricing kicks in. Therefore, conventional drivers are not that disadvantaged in terms of offering cheap fares to riders.
Moreover, the price argument incorrectly presumes that if a transport service is priced similarly to ride-hailing apps, then people will choose to use conventional transport services. But this is not necessarily true. In many cases, many of my interviewees in Manila and Jakarta find ride-hailing apps to be expensive and yet use them over conventional transport due to perceived benefits of safety and convenience. Therefore, the inability to compete on price is not a convincing explanation as to why they are losing market share, let alone a justification to call for government intervention.
Conventional drivers argue that online drivers and ride-hailing apps threaten their livelihoods, and therefore governments must intervene to protect them. However, the weakness of this argument is clear: it demands that the livelihood of incumbents be protected by depriving online drivers of their livelihood. But if conventional drivers deserve a livelihood, so too does everyone else, including online drivers whose livelihoods are threatened by calls to stifle or ban ride-hailing apps.
Some may be tempted to dismiss the concerns of conventional drivers and instead admonish them to adjust to the times. However, incumbent drivers cite their inability to adapt to new technologies, learn a new trade or join ride-hailing apps as obstacles to doing this. To be fair, some groups suffer from real constraints. For example, lack of education and old age do hinder the ability to learn to use new technology or re-skill. In an interview with a researcher from Telkom University in Bandung, an ojek driver explains, “We are older and less educated… So it is very hard for us to understand new technology.” Under-privileged classes have less access to capital needed to ride the waves of technological change. Take for example the embittered Indonesian drivers who cannot afford to buy new cars to join ride-hailing apps, and are thus left out.
If conventional drivers deserve a livelihood, so too does everyone else, including online drivers whose livelihoods are threatened by calls to stifle or ban ride-hailing apps
But on the other hand, individuals possess agency—the capacity to act with resolve, hard work, and creativity, despite the pressures of the environment. A principled government clerk can commit to work cleanly even in a department rife with corruption. An orphan will naturally feel disheartened, but he or she can gather the resolve not to let this tragedy define the future. Likewise, it could be argued that conventional drivers can strive to solve their problems without blocking the growth of technologically-aided services in transport. But the problem with agency is that it puts the burden of finding a solution on people already saddled with income insecurity and lack of privilege.
The question is then, what level of support is society willing to offer people facing difficulties beyond the remedy of individual agency? This varies per society and is an issue that goes beyond the aims of this piece. What is clear is that the more a society is collectively willing to support its downtrodden citizens, the greater the latitude of conventional drivers to call on governments to intervene in their favour.
In sum, the livelihoods of conventional drivers are indeed under threat. But this is not a principled basis to ask governments and the public to withdraw support from ride-hailing apps, because doing so also deprives online drivers of their livelihood. Moreover, people can first tap into individual agency—one’s will power and resourcefulness—before obliging society to solve their problems. But, as will be discussed later, livelihood issues are grounds to ask governments for social safety nets, which need not take the form of stifling ride-hailing apps.
4. Protecting culture and traditions
Another argument raised by conventional drivers, in Bali and possibly elsewhere, is that ride-hailing apps are incompatible with their culture and traditions, and therefore must be restricted or banished to preserve their unique way of life. Taxi drivers invoke Bali’s local wisdom—a set of unwritten village rules which divide Bali into several territorial communities (called banjar) and dictate that only locals from a banjar can attend to tourists within that banjar’s boundaries. To respect this fragmented territorial system, drivers dropping off tourists to other banjars return home without passengers, earning a one-way fare despite incurring roundtrip gasoline expenses and car depreciation. As a result, conventional taxis charge more than ride-hailing apps and lose customers to the latter.
Moreover, Business Insider reports that conventional drivers take home only about 70% of their fare and surrender the rest for the use of their community. The payments, which seem like informal community taxes, are used for road maintenance, religious ceremonies, traditional village peacekeepers, and the expenses of the taxi association on car insurance, lawyers, member loans and so forth. This communal practice keeps taxi fares high and depresses net incomes. It also fuels a disdain for online drivers who are seen to profit from their banjars without giving back to the community. For example, a driver association in Bali gripes that they built the roads even when the local government would not—and online drivers use these roads without contributing to the upkeep.
Culture and traditions are closely intertwined with a people’s history, values and identity, thereby possessing a moral force—which may cast even constructive criticism as insensitive and materialistic. Hence, I will not direct my analysis to culture and tradition per se, but to the claims of conventional drivers that they faithfully interpret and protect culture and traditions.
The cultural protection argument is sound if two conditions of authenticity and veracity are met. First, the practices they defend must be deeply cultural, rather than superficial. Is a practice inseparable from the core features of a culture, to the point that its disappearance will diminish a culture’s totality? To what extent is a practice a unique feature of a culture, rather than a natural consequence of the universal tendency toward self-interest and profit? In short, is it really an authentic part of culture, or is it simply there to protect the profit and self-interest of conventional drivers under the guise of culture?
Take Bali, where resistance to ride-hailing apps is enmeshed with narratives of enduring communality and sacred traditions. And yet half of taxi drivers with eligible cars are now said to work for ride-hailing apps (which require newer cars). The ease with which they left the banjar system raises questions about its supposed importance in Bali’s cultural identity. Moreover, it is said many drivers only oppose ride-hailing apps out of spite, as their cars are too old for ride-hailing apps, leaving them embittered and antagonistic. If true, this casts doubts on whether the territorial transport system is a core part of cultural identity, or a practice serving narrow economic interests.
If the defence of a practice relies so readily on violence, does that practice still resonate with a culture’s deepest values? Doesn’t it deserve a rethink as to whether it is time for reform?
The second test is whether the drivers indeed protect traditions in the manner that they claim. When an association says that they volunteer around 30% of revenue to preserve their communal culture, evidence or any assurance of its truthfulness strengthens their cause. After all, it is not unheard of for community service to be used as a façade for self-interest—just look at how companies use charities to evade taxes.
To be fair, many cultural rules are implicit, and so it is perfectly understandable that there are no verifiable records of such community taxes. Nonetheless, the factuality of the cultural protection claim is worth looking at. In the example above, this can be addressed by triangulating evidence from other members in the community said to be benefiting from the implicit community tax.
Lastly, I offer some thoughts to those who use the culture argument, and the parties (such as governments) having to consider the matter: tradition and culture are not static concepts, and instead can be conceived as the selective assimilation of new practices that resonate with a culture’s core values and self-image. If the defence of a practice relies so readily on violence, does that practice still resonate with a culture’s deepest values? Doesn’t it deserve a rethink as to whether it is time for reform?
Lessons for the future
The analysis above shows that the conflict is not a simple story of the victimhood of conventional drivers at the hands of rapacious technology firms and online drivers. Neither is it a purely unreasonable resistance to technological change. As the conflict evolves, the concerned public and governments might want to remember three lessons.
1. Look beyond the smoke and mirrors
To gain political support from the public and governments, both sides of the conflict offer arguments designed to persuade and attract support, rather than tell the real story. For example, online drivers may see themselves as regular citizens just trying to earn a living—even if they sometimes ignore laws that regular citizens ought to follow. Ride-hailing companies may market themselves as exemplars of progress and change, even if change is not always for the better. As I showed earlier, change can inflict pain on some groups, particularly the underprivileged conventional drivers who do not have the skills, privilege and capital to take advantage of new technologies.
Likewise, incumbent transport groups can use the same posturing strategies. The arguments invoking the law give the appearance that conventional drivers are on the side of order, justice and fairness—and thus frame their cause as virtuous and moral. Arguments based on the right to livelihood can be easily used to portray anyone who provides a contrary opinion as callous and anti-poor. The culture argument may portray those opposed to it as insensitive and materialistic. The inability to compete on price can be used to gloss over embarrassing failures to compete on quality, safety and convenience. Thus, the value of these arguments for incumbent interest groups is not in their logical soundness, but in their ability to attract sympathy and political support. Hence, it is crucial for the concerned public and governments to identify which arguments are merely designed to persuade and which ones tell the real story.
2. Understand the implications of demands from parties involved
So beyond the posturing, what response will satisfy conventional drivers committed to opposing online drivers? And can governments afford to give in while upholding their mandate of serving the public interest?
The price argument offers an interesting clue because conventional drivers who cite it openly reveal that they cannot make commercially attractive offers to consumers. But their commercial disadvantage extends beyond price, even if they do not want to admit it. My interviews with app users and direct experience in Manila and Jakarta reveal that online drivers can also beat conventional drivers on cleanliness, quality, convenience and safety. Conventional drivers can hardly outdo the efficiency of the instantaneous matching systems used in ride-hailing apps. The resulting severe commercial disadvantage poses an existential threat. For many conventional drivers, this is reason enough to ask governments to make it disappear.
Here lies the heart of the conflict. A prevailing governance principle holds that the powers and resources invested by the public in their governments ought to be used on public issues, rather than on narrow private concerns such as commercial disadvantage. This principle is relatable even in daily life. If one’s food stall just cannot beat the neighbourhood’s favourite hawker on price and taste, it is hardly reasonable to demand that the village council use village resources to prop up the losing stall and handicap the popular hawker. Hence, commercial disadvantage is not necessarily a problem that deserves government attention or public resources. If a party wishes their private problem to be seen as a public concern, the burden is on them to prove that there are social aspects that warrant government intervention. Otherwise, the logic of the market holds sway: sink or swim based on the ability to compete commercially and attract users.
If something is inherently superior in price, quality and customer acceptance, it is doubtful that even the fairest of competition laws and impeccable law enforcement will help the inferior party regain commercial advantage. A balanced playing field where enterprise thrives on its merits is precisely the kind that will weed out those encumbered by commercial disadvantage
But if something is inherently superior in price, quality and customer acceptance, it is doubtful that even the fairest of competition laws and impeccable law enforcement will help the inferior party regain commercial advantage. A balanced playing field where enterprise thrives on its merits is precisely the kind that will weed out those encumbered by commercial disadvantage. The demands of conventional drivers can even be construed as precisely a call for unbalanced laws that privilege them and hinder the competition posed by technology. Even if there are cosy ties between incumbent transport groups and certain government officials, governments cannot grant these concessions without risking disapproval from the riding public who may prefer ride-hailing apps.
As has been attempted in this paper, governments must constantly assess whether the demands of any party compromises their mandate to use their powers and resources to serve the interests of the people.
3. Identify actionable social problems
On the other hand, the grievances of conventional drivers, despite primarily being private commercial concerns, may have implications on public welfare and society at large—and thus merit government action. This approach also gives conventional drivers clues on how to better engage governments and make appropriate demands based on social impact.
For example, underprivileged drivers suffer from lack of access to education and capital, diminishing their chances to compete in the market. They may be justified in demanding social safety nets to offset systemic poverty caused by globalisation, lack of privilege, technological change and capitalism’s uneven wealth creation. This can come in the form of government-funded training in vocational skills or livelihood loans. There is also a risk that the use of low fares by ride-hailing apps to corner market share is a prelude to predatory pricing: ride-hailing apps use cheap fares to drive competition out of business and once gone, the market is held hostage to whatever exorbitant fares as they see fit. To address this risk to society, conventional drivers can reasonably demand specific laws, including those which limit how much ride-hailing apps lower fares.
Finally, there is a lack of clear laws that foster balanced competition and ensure ride-hailing apps protect consumer interests and the greater good of society. To make sure that online drivers stick to the limits placed upon them, conventional drivers can lobby for stronger law enforcement, even if that means having to obey the laws themselves. Regardless of the shortcomings of conventional drivers in terms of service quality and compliance with the law, these social issues deserve the full attention of governments. In turn, governments must form policies that uphold the greater good rather than cater narrowly to lobby groups on either side of the conflict.
Meanwhile, it is not only drivers from both sides who suffer. Going back to that night in Canggu, my wife and I languished by the pavement as the night deepened and half-drunk tourists ambled along. Still no public transport, no vacant taxi, and no online driver reckless enough to accept our booking. Desperate, we called our hotel in Tibubeneng to send their car service, costing us nearly twice the fare of ride-hailing apps.
Godofredo Ramizo Jr is a PhD candidate at the University of Oxford, studying the social impact of digital technologies and the platform economy. An Oxford Clarendon scholar, his dissertation investigates the effects of ride-hailing technologies in Southeast Asia’s gridlocked megacities.