The rapid expansion of foreign-owned electric taxi services in Indonesia has triggered growing resistance from local transport operators, industry associations, and policy observers, with protests and rejections emerging in several provinces. At the center of the controversy is Xanh SM (Green and Smart Mobility), a Vietnam-based electric taxi company that has begun operating in major cities and is planning nationwide expansion.
Public policy observer Agus Pambagio warned that the entry of large-scale foreign taxi operators risks undermining Indonesia’s domestic transport ecosystem. While consumers may benefit from more choices and lower fares, Agus argued that competition is no longer taking place on a level playing field.
“Unfortunately, the impact is very negative because existing local operators will be pushed out of the market due to the massive foreign capital and subsidies behind Green SM,” he said during a public discussion in Jakarta, Wednesday (December 17, 2025) as quoted by MSN.
Agus highlighted concerns over the company’s reliance on fully imported vehicles, noting that thousands of its electric taxis enter Indonesia as completely built-up (CBU) units, despite government efforts to boost local content requirements (TKDN) and encourage domestic electric vehicle manufacturing. He likened the strategy to “capital dumping,” where companies aggressively subsidize fares to capture market share—an approach previously seen during the early expansion of ride-hailing platforms.
Protests Escalate in Several Provinces
Opposition has intensified at the regional level. In West Java, the Regional Land Transport Organization (Organda) rejected plans to deploy 2,000 foreign taxis in the Greater Bandung area, warning that many local taxi firms are already struggling to survive. Organda West Java secretary Ifan Nurmufidin cautioned authorities against issuing permits without considering local business sustainability.
“Regulations are unclear and supervision is weak. As a result, licensed taxis are increasingly sidelined,” he said.
Similar concerns have surfaced in Surabaya, where Organda criticized the arrival of hundreds of electric taxis from Vietnam. Chairman Sunhaji Ilahoh said the approval came as a surprise to local operators.
“The recommendation issued by the Transportation Agency is certainly shocking for us,” he said in July 2025, as reported by Berita Jatim, adding that local businesses were not consulted prior to the decision. He emphasized that competition is acceptable only if it follows transparent rules and involves dialogue with existing operators.
In Makassar, transport drivers and Organda leaders have also voiced objections, warning of job losses and market imbalance due to the company-owned fleet model, which differs from the driver-owned vehicles common in Indonesia’s ride-hailing sector.
CELIOS: Market Growth and Fair Competition
Economists note that the issue is not entirely one-sided. Director of Digital Economy at the Center of Economic and Law Studies (CELIOS) Nailul Huda said Indonesia’s online transport market remains attractive and diverse.
“This shows that the market share for online transportation is still quite large,” he said, as quoted by SWA, adding that conventional and online transport serve overlapping but distinct segments, making competition inevitable.
CELIOS also warned that broader economic pressures—such as inflation and weakening purchasing power—should be considered in policymaking. Clear regulations and fair competition frameworks, it said, are essential to protect consumers and local industries, ensuring that innovation does not come at the cost of long-term market fairness as foreign electric taxi services continue to expand.
Source: MSN, Warta Ekonomi, Berita Jatim, Online24Jam, SWA
Photo Credit: en.wikipedia.org
