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Việt Nam ride-hailing firms gear up to compete with Grab

Update: April, 03/2018 - 07:00
With Uber bowing out and Grab consolidating the market, domestic transport enterprises could invest in expanding their market share, giving consumers more options. — Photo nld.com.vn
Viet Nam News

HÀ NỘI — After Grab’s takeover of Uber on March 26, some Vietnamese transport businesses are taking advantage of an opportunity to invest in the lucrative ride-hailing market.

Phạm Văn Dũng, head of TaxiGo application development, told the online newspaper dealstreetasia that Grab’s acquisition of Uber’s entire business in Southeast Asia is creating opportunities for other local businesses. “Customers always want to have different options,” he said. “The acquisition of Uber will bring us as well as the other parties an opportunity to participate more deeply in the market.”

VATO allows customers to bargain price

Trần Thành Nam, the founder of Vivu Technology Development JSC, told Việt Nam News that Uber’s decision to withdraw from Southeast Asia prompted businesses to increase investment in ride-hailing applications.

Nam also revealed that Phương Trang Tourism Service and Transport JSC has invested almost US$100 million into Vivu and renamed it Vato, reflecting their plans to develop a variety of e-commerce services.

This car application sets a minimum price of VNĐ25,000 (US$1.1) per ride and then allows users to bargain with the driver for the most competitive price. It launched on Monday for customers in Hà Nội and HCM City.

Up to 200,000 people have downloaded Vato’s application so far, Nam added.

With 2,000 cars registered, the default price for customers will be VNĐ8,500 per km, similar to Grabcar. The commission rate that drivers have to pay is 20 per cent, five per cent lower compared to the current rate for Grab.

Low commission rate, no increasing price in peak hours

Meanwhile, Hồ Huy, chairman of Mai Linh Group, one of Việt Nam’s leading taxi firms, said that the number of drivers registered to use the company’s technology platform has surged since the Grab-Uber merger.

Mai Linh Bike is setting itself apart from Grab by collecting only a 15 per cent of commission and will purchase drivers’ uniforms if they earn revenue of VNĐ2.5 million or more in the first month. Mai Linh will also buy insurance for all drivers after six months of working. The rate charged by Mai Linh Bike is VNĐ11,000 for the first two kilometers and VNĐ3,700 per additional kilometer. Prices won’t rise during peak hours, Huy said.

Dealstreetasia earlier reported that Grab’s arch-rival, Indonesia’s Go-Jek, is also said to be preparing to enter Việt Nam in what would be its first expansion outside its home market.

According to economic specialist Bùi Quang Tín, with the gap that Uber left, domestic transport enterprises could invest in expanding their market share and consumers will have more options. The companies that provide the best services will win.

With new entrants in the market, each service will compete to improve the quality of the technology, prices and service quality, Tín told the newspaper Tuổi Trẻ. — VNS

 

 

 

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