But observers warn the regulation could lead to more conflict and worse options for customers.

“The Pergub (Governor Regulation) will organize areas of operation, determining which areas online taxis are permitted to operate in and we will work closely with taxi community organizations as well,” Wayan said, as quoted in a report from Bali Post.

This move seeks to avoid clashes between conventional and online taxis, and to allow the former to preserve their operational bases, which were established long before ride-hailing services arrived on the island.

Though the Indonesian Transportation Ministry already has regulations on online taxi services in place, Wayan said Bali’s tourism industry sets the province apart from the rest of the country. He expressed a commitment to support conventional taxi companies, according to Bali Post.

Koster said his new regulation would also require online taxi drivers to provide Bali identity cards and drive cars with Bali license plates.

While it makes sense for the local government to try and appease conventional taxi drivers, who feel like they’re unfairly losing business due to the arrival of online taxis, it remains to be seen how this move could benefit consumers, particularly considering that conventional taxis in Bali tend to charge higher prices.

“If this regulation were to be implemented, conventional transportation will monopolize further and grow more arrogant with their prices, because they won’t have any more competition,” Aryanto, director of Jayamahe Transport, a Bali-based transportation service, told Tribun-Bali.

Aryanto added that the governor’s new regulation has the potential to conflict with other existing regulations in the country, including a 1999 law targeting monopolies and unfair business practices. Bali has seen a number of clashes between regular metered taxi drivers and those working for ride-hailing apps over the years. In March, a clash was recorded on video, capturing an altercation between a Grab employee and a gang of airport taxi drivers.