Thursday, 2023 December 7

Vietnam’s taxi associations file complaint over unfair competition against Grab

Major taxi associations in Vietnam’s three biggest cities Hanoi, Da Nang, and Ho Chi Minh City have contacted the National Assembly, the country’s legislative body, complaining about unhealthy competition between taxi operators and ride-hailing service Grab, local media VnExpress reported on Wednesday.

The associations are claiming that Grab’s operating model enables it to manipulate fares which “could inflate by 200% to 300%” during certain times, while taxi operators are required to disclose their charges to passengers, according to the report.

The news comes seven months after the government under Prime Minister Nguyen Xuan Phuc legalized ride-hailing services in April, allowing private operators to enter the business by either installing a taxi roof sign or attaching a decal with the word “taxi” or “contract car” on their vehicles.

The decree, which was expected to level the playing field between regular cabs and ride-hailing vehicles, also meant that taxis will no longer be obliged to have taxi roof-signs and can opt for the cheaper solution of having a decal only.

The taxi associations though claimed that Grab, the company, should be classified as “auto transport business,” which it is not at the moment, and therefore operating illegally. The National Assembly should also “inspect Grab’s entire operations” to ensure fair competition and transparency.

Grab Vietnam did not immediately respond to an emailed requests for comment.

The company 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.

Although it is constantly embroiled in petitions from traditional taxi businesses, which have been greatly affected by its arrival, the only notable case has been a lawsuit by taxi firm Vinasun, which Grab had to compensate with VND4.8 billion (USD 208,700) in damages.

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

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


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