An interesting story appeared in the Jakarta Post a couple of days ago. Let me offer a passage from the article before I make a few comments.

Thousands of taxi drivers in Batam, Riau Islands, went on strike on Tuesday and rallied at the municipal office, blocking a number of roads.

The drivers — grouped under the Barelang Taxi Drivers Communication Forum (FKPTB) — opposed the increase in the operation quota of the Jakarta-based Blue Bird taxi fleet, which the drivers claimed had reduced their income.

The FKPTB mobilized at least 2,000 taxis parked along the government complex in Batam Center from Tuesday morning, while other FKPTB members blocked Blue Bird taxis from entering a number of ferry terminals and Hang Nadim International Airport.

At the entrance of Hang Nadim airport, a number of taxis could not enter due to the protest, forcing passengers to walk. Ferry terminals such as Harbor Bay Batam, which serves the Batam-Singapore route, were also affected.

FKPTB head Joni Efrianto said the protest was aimed at urging the government to issue a policy not to increase the operating quota for Blue Bird taxis.According to Joni, based on an earlier meeting, Blue Bird requested the operation of an additional 25 taxi cabs that the FKPTB agreed to, but the latter wanted clarification from Batam municipality that there would be no more increases in the quota for Blue Bird taxis.

As someone who has been visiting Indonesia since 1998, this scenario is very familiar. Outside Jakarta, taxis in Indonesia have long been a headache. A typical scene. You turn up at a port or airport in Makassar, Jambi or Ambon and there are no taxis which will use their meter. They all want to charge highly inflated prices to go anywhere. Rp 100,000 for a 10 km ride into town, or whatever. Some of the characters involved are fairly aggressive and are not exactly good ambassadors for Indonesian tourism. I have heard stories who backpackers who were so badly ripped off or intimidated upon coming into Batam or Medan that they turned right around and went straight back to Singapore or Malaysia. The scenes described above are very similar to what happened when Bluebird first arrived in Bandung too. Lots of protests and attempts to block Bluebird taxis.

This whole thing says something about the way business is done more broadly in Indonesia. These mafias (or small-scale cartels) close ranks and use intimidation tactics to try and shut out competitors. They try to maintain their profit margins by refusing entry of competitors onto their “turf”. Indonesia is a place where “mafias” flourish in all sorts of unlikely places: taxi ranks, tax offices, ojek (motorbike taxi) stands and street markets. I recall hearing one backpacker complain because he was forced to pay Rp 50,000 just to go 2 km uphill to see a waterfall. The ojek drivers got quite aggressive and told him he couldn’t go to the waterfall without using a motorbike taxi (ojek).

Similarly, a guide “mafia” exists in many national parks and on popular mountains. In Bukit Lawang people are forced to pay $15 per hike to go along with an official “guide”. Tourists often complain that these guides know nothing about wildlife and are usually no more than high-school dropouts. Complaints of sexual harassment from women are commonplace. In the background is always the police, who often work as the “enforcer” of all these mafias, taking a nice cut of the proceeds. Because these sorts of mafias attract some unsavory characters, tourists to Indonesia are often left with an unflattering view of Indonesians generally. They make the mistake of concluding Indonesians generally are “pushy” or “dishonest” when they have just been scammed by a taxi or guide mafia.

This tendency to form “mafias” has its roots surely in the corrupt-plagued Suharto era. In those days people had to pay hundreds of dollars to get a lowly position in “graft prone” institutions like Customs and Excise. They wanted in on the “action”. Suharto’s own children set up monopolies in things like cloves and oranges, squeezing suppliers and then overcharging customers, generating massive profit margins. Recent revelations about election-fixing at the Constitutional Court show that the judiciary is also controlled by a “judicial mafia”, which means that no Indonesian can be assured of receiving a fair and impartial hearing in court either. Mafias have found their way into every nook and cranny of the island nation.

TBI has long denied that  the company is controlled by a mafia based around Ibu Mariam, Pak Reza and Luke Preece. In fact they have said that is sheer lunacy- completely unbelievable. In reality, collusion and corruption are common in public life in Indonesia and shutting out competitors is a familiar practice. The problem with this way of doing business is it guarantees that customer service remains at rock-bottom levels, as anyone familiar with overcharging Batam taxis can attest. TBI, despite its pretensions, is more like a Mafia-run taxi company than Bluebird these days. The current clique (mafia) have driven out all the expat managers (due to nothing but fear of competition) and replaced them with tame stooges who say, “Yes Luke”, and “Yes Pak Reza” and show no initiative or innovation. And they wonder why they are losing market share so fast.