I recently visited Bali and had pre-arranged for a driver to take me from the airport to my hotel. This was a 2 hour trip, and I used the opportunity to get to know my driver Jack and his line of work.
Jack comes from a family of drivers. He has 3 brothers — all of whom drive tourists for a living. Net of nearly all costs, Jack makes $USD 4,800 a year — which is in-line with Balinese GDP / capita . Interestingly, he is unemployed half of the days of the year, and his biggest challenge is finding customers.
Why hire a private driver?
Transportation is not something I usually bother booking ahead of time, but Bali is a special case.
This certainly feels a bit overwhelming in what should be a tropical paradise. So it’s nice to be able to have a personal driver meet me inside the airport.
In every other part of the world, I’ve used Uber or the local equivalent. Bali is one of the few places where I’ve hired a dedicated private driver — for 2 main reasons.
- Reason #1: Bali is a big island, and there are lots of places to explore. As a tourist, if I Uber over to some distant waterfall, who will drive me back? Will there even be cell phone reception? What if my phone dies? Hitchhiking no longer feels as exciting to me at age 29 as it did at age 21.
- Reason #2: It’s fun to build trust with someone from a different culture and learn new things. It’s nice to meet a local whom I feel safe around and who feels comfortable answering my personal questions like a) how much his car costs and b) how much he earns.
Start-up idea: daily driver booking platform in Bali
This got me thinking. What if there was a company that focused purely on providing daily drivers in Bali?
The Uber model isn’t ideal due to the aforementioned reasons.
And tour guides serve a different function than drivers. Rarely do I want a guided tour, but I will always need to get to my destination.
This potential start-up would fill the gap in-between Uber and a full-on tour agency.
Market size calculation for a private driver matching service in Bali
By my estimates — the market for matching drivers for daily trips in Bali is about $4mm annually.
While this may not be the next Uber, the beauty of this business is that all you need to get started is a smartphone & some hustle.
Simply take requests from tourists via WhatsApp, and match them to drivers via a group thread. (This was how I was originally introduced to Jack).
Acquiring both sides of the marketplace
Finding the supply is easy. I have your first 4 drivers for you: Jack and his brothers. There are 1,000+ candidates waiting at Denpasar airport any given day. Just go and speak to a few of them, size them up, select the best, and get their phone #s.
When chatting with candidates, you should screen for drivers with above-average communication skills & extrovert tendencies. As a tourist, Wikipedia can tell me all I really need to know about the temple I’m visiting. But if I want to learn about the nuances of local culture + economy, nothing beats chatting with a local!
Finding demand will be harder. The first thing I would try is to go to the smaller hotels and offer them 5% to refer guests to your private driver service. The big hotels have their own full-time drivers already, but many small hotels, including one I stayed at on this trip, don’t offer anything in the realm of transportation. Partnering with you would be a win-win proposition.
Vacation-home owners / managers would similarly be a good target. Perhaps you could even partner with AirBnb directly.
Overcoming disintermediation risk
Why wouldn’t drivers and tourists just go off-platform? There are things you can do a) immediately and b) in the future to reduce that risk.
Things that encourage tourists to stay with the service
- Offer roadside assistance: customers receive comfort knowing that a 3rd party is watching over them and can help if issues arise
- You can collect emergency contact info + address any special requests, i.e. allergies
- In the future, you can take credit card payments up-front to help consumers a) avoid the hassle of cash and b) receive the benefits that many card-issuers offer such as trip protection.
Things that encourage drivers to stay with the service
- Your 15% commission is much more reasonable than Uber’s 30%. And because this is such a capital-light model (no need to hire engineers for some time), you can afford to scale with a lower take-rate.
- Make it clear that the more rides drivers do via your system, the more future business you will send their way
- In the future, you can build-in a rating + review system to further strengthen the marketplace network effects
In conclusion
- The global middle class is expanding. Independent travel is increasing.
- At least in Bali, there is an imbalance between the supply & demand of private daily drivers.
- The gap between Uber and full on tour agencies represents an opportunity not just in Bali but perhaps beyond (Koh Samui, Phuket?)
I really hope that someone out there reads this and gives the idea a shot.
At the very least, I’m sure you’d have fun. After all, there are far worse places to work in the world =)
Let me know how it goes!
Author’s note 10/20: I have been informed that Grab (Uber equivalent in SE Asia) does offer daily driver bookings. So while such competition creates challenges, it also validates the market opportunity. There could still be an opportunity for a focused, standalone service to provide a better user experience.
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About the author: Yishi the co-founder & CEO of DeepBench — We connect users with experts on any topic in any industry, and we also license our software to enterprises to better unlock expertise internally. (Check us out if you are interested in joining our network or using our product!)
