Logo of Phnom Penh Post newspaper Phnom Penh Post - VN ride-hail apps struggle to compete with Grab

VN ride-hail apps struggle to compete with Grab

Content image - Phnom Penh Post
A Grab motorbike taxi rider plies between vehicles on a street in Hanoi on April 19. Roslan RAHMAN/AFP

VN ride-hail apps struggle to compete with Grab

Vietnamese ride-hailing businesses are still struggling to grab market share even after the departure of Uber from Southeast Asia and complaints about the top ride-hailing app Grab.

After Uber’s exit, Vietnamese apps TaxiGo, Vivu, T.net, Xelo and Vato were set up to compete with Grab. But they have failed to attract as many passengers, mostly due to lack of advertising and promotions.

After Uber left, Grab’s rates increased, especially during peak hours, holidays or during bad weather, according to many passengers in HCM City.

Tran Thi Kim Hong, 50, of HCM City’s District 4, who uses Grab to go to work every day, said: “They no longer offer discounts as much as before, with prices rising 10-20 per cent, and even 50-80 per cent during peak hours.”

The peak period now is one hour longer compared to the past period. “The rates also went up during non-peak hours, especially in areas where there are fewer cars,” she said.

Grab drivers have complained about high commission rates, nearly 20 per cent for veteran drivers, and more than 28 per cent for new drivers.

Biggest market share

Some drivers said they were working more hours but earning less money, while others who took out loans to buy a car said they were driving 10-12 hours a day so they could pay back their loans.

Despite complaints from drivers and some passengers about Grab, the company still retains the biggest market share.

Vietnamese companies have invested less in advertising and have had fewer promotions.

In addition, since many of them do not have enough cars and drivers, passengers often have to wait for a long time.

‘Best service will win’

In some areas, for example, passengers have complained that it was difficult to get in touch with Vato, which received a $100 million investment from Phuong Trang Tourism Service and Transport JSC in a bid to compete with Grab.

Although the prices for T.net and Xelo are reasonable, passengers have also complained that it was difficult to reach them by phone.

To attract drivers, many Vietnamese businesses have exempted the commission rate for drivers during the initial period, and then later take a low commission rate of no more than 15 per cent.

However, due to a limited number of passengers, the local businesses cannot find enough drivers.

Drivers for the Vietnamese businesses have also complained about changing policies.

As soon as revenue increases, the company’s commission rate usually goes up as well, they say.

As of the end of 2017, Grab had attracted $2 billion worth of investment from partners to serve the Southeast Asian market. In May, Toyota raised $1 billion for Grab.

Meanwhile, most Vietnamese ride-hailing app businesses must rely on their own resources, and have not called for investors.

Nguyen Xuan Thuy, of the Division of Transport at the Ministry of Transport, said: “What [Vietnamese passengers] need is good service at a reasonable price.”

“The more competitive the market is, the more customers will benefit. It’s important that Vietnamese businesses recognise their shortcomings to improve their services,” he said.

Economist Bui Quang Tin said Vietnamese ride-hailing apps should take advantage of Uber’s exit from the commercial arena to expand their market share and offer more choices for local commuters.

“Those who provide the best service will be the winners,” he said.

As of April 8, all Uber rides had shifted to the Grab app, which meant that former Uber drivers had to either join Grab or stop working.

In the deal when Grab took over Uber operations in Southeast Asia, Uber was allowed to retain 27.5 per cent of Grab’s shares.

MOST VIEWED

  • Reports: Rainsy barred from Jakarta flight

    Sam Rainsy was on Wednesday refused entry to a flight from Malaysia to Indonesia, media reported late on Wednesday. The “acting president” of the Supreme Court-dissolved Cambodia National Rescue Party’s announced return to the Kingdom on Independence Day on Saturday failed to occur. Rainsy

  • Government studying EU’s preliminary report on EBA

    The Ministry of Foreign Affairs and International Cooperation on Wednesday said the government was studying the EU Commission’s preliminary report on the human rights situation in the Kingdom that could lead to a suspension of access to its “Everything But Arms” (EBA) agreement. The

  • Phnom Penh International Airport wins award as passenger traffic soars

    The Phnom Penh International Airport has been awarded Best Asia Pacific Regional Airport 2019 for its sustained high growth in passenger traffic in recent years. The award was presented by the Capa Centre for Aviation (Capa) – a world-leading and trusted organisation that provides market intelligence to

  • Gov’t: Rainsy’s ‘coup plot’ a failure

    The government on Wednesday commended the Kingdom’s security forces for thwarting the attempted “coup plot” by former opposition leader Sam Rainsy through his announced return to Cambodia on November 9. The comments came as Rainsy, the “acting president” of the Supreme Court-dissolved Cambodia National Rescue

  • Chinese tourists lead international visitors

    Chinese tourists again topped the list of foreign visitors to Cambodia during the first nine months of this year, with the Ministry of Tourism on Wednesday reporting a 30 per cent increase on the same period last year. The Kingdom received 4.81 million international tourists in that

  • Tour guides question animal release ban in Angkor moat

    The Khmer Angkor Tour Guide Association (Katga) called on the Apsara National Authority to reconsider its decision banning all animals from being released into the moat surrounding the Angkor Wat temple after the authority prohibited the action for the sake of visitors’ safety. An Apsara