Vietnam Business Channel

Taxi associations in Vietnam file complaints against Grab for unfair competition

Vietnam’s ride-hailing sector is projected to be worth $4 billion USD in 2025.

Taxi associations in Vietnam’s three largest of cities Hanoi, Ho Chi Minh City and Da Nang have contacted the Vietnamese National Assembly and filed a complaint about unhealthy competition between taxi operators and Grab, the ride-hailing service.

According to the complaints by the three associations of the three cities, taxi operators base their charges upon set rates based upon distances, while Grab’s operating model enables it to continually manipulate fares which “can be inflate by 200% to 300%” during peak times, which does not serve the interests of the public.

The complaint by the taxi associations comes seven months after the government legalized ride-hailing services in April, which allows private operators to enter the ride-share business by either installing a taxi roof sign or attaching a decal with the word “taxi” or “contract car” on their vehicles.

The governments decree was envisioned as a mechanism that would increase completion for the benefit of consumers while also creating a more transparent and level the playing field between regular cabs and ride-hailing vehicles.

However, after seven months of implementation, the taxi associations claim that Grab should be classified as an “auto transport business,” which it is not at the moment, and is therefore operating illegally. The taxi association also calls upon government entities to “inspect Grab’s entire operations” to ensure fair competition and transparency.

Grab entered Vietnam’s lucrative ride-hailing market in 2014 by launching the GrabTaxi service. It received approval from the Ministry of Transport to roll out a pilot e-hailing project in Hanoi, Ho Chi Minh City, and Danang in 2015.

Since entering the Vietnamese market, Grab has been embroiled in several legal controversies, including its reluctance to pay taxis as prescribed by local authorities, and a lawsuit with Vinasun, which resulted in Grab having to pay $208,000 USD in damages.

Grab currently holds an estimated 70% of the raid-hailing market in Vietnam, several local services, such as FastGo and Be, have sprung up. GoViet, its closest rival, has yet to launch car-hailing services.

According to the 2020 Google-Temasek-Bain report, Vietnam’s ride-hailing sector is growing at an average rate of 38% and is projected to be worth $4 billion USD by 2025.

 

 

 

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