Apr 03, 2018 / 11:01

Competition between ride-hailing apps heats up

The Hanoitimes - Grab`s acquisition of Uber marks the end of the latter`s presence in Vietnam and the Southeast Asian markets.

After 4 years of fierce competition with Grab, Uber has left the Southeast Asian ride-hailing market in exchange of 27.5% shares in Grab, according to Grab's confirmation on March 26. Consequently, Uber app will no longer be operational since April 8.
Illustration photo.
Illustration photo.
While the Ministry of Industry & Trade (MoIT) is considering whether the acquisition is in conformity with the competition law, requesting Grab to report the acquisition of Uber's South-east Asia business before April 3, another competition between ride apps is expected to heat up.

Phuong Tranh Tourism Service and Transport announced its decision of investing VND2.2 trillion (US$100 million) into Vivu - an app-based taxi services and renamed Vato. 

One notabe difference between Vato and Grab or Uber apps are the former to allow passenger bargaining the fare with drivers (Vato set the minimum fare).

Besides, Vato currently sets the fare at VND8,500 (US$0.37) per kilometer, which is equal to that of Grab. However, the commission rate for Vato drivers is 20% compared to 25-30% applied to Grab drivers. 

With such advantages, Vato is expected to gain a slice of the ride-hailing market, as the app  will go into operational in April.

Another promising ride-hailing app is DiDi Vietnam. From the app, user can see the location of DiDi Car, DiDi Taxi or DiDi VIP in map, from which they can set the route, looking at the driver's profile, checking the fare and reviewing the driver. 

DiDi Vietnam has been available for 1 year and attracted a certain amount of users. Vietnam currently has 10 ride-hailing apps with similar functions to Grab or Uber, according to the Ministry of Transport. 

Besides, other foreign operators, such as Lalamove or Go-jek also eyes the Vietnam's ride hailing market, with the latter is recruiting Vietnamese staffs. 

Additionally, other traditional taxi companies such as Thanh Cong, Taxi Group, Ba Sao, Mai Linh or Vinasun have introduced its owned ride-hailing app. 

Mai Linh, for example, in addition to other transport services, the company also offers goods shipping and picking up children at schools. 

Grab on March 26 confirmed that it has acquired Uber's South-east Asia operations for an undisclosed sum, but described as worth "several billion dollars" by Uber CEO Dara Khosrowshahi in an email sent to employees, putting an end to recent speculation about the merger between the two ride-hailing giants.

Grab will also inherit 500 Uber employees across the region, according to the email, additionally, "over the coming weeks we will help our customers move to Grab's apps." Khosrowshahi stated he is convinced that "combining forces with Grab is the right thing to do for Uber for the long term."

This is just the latest international retreat by Uber, which sold off its operations in China in 2016 and in Russia in 2017.

Grab and Uber arrived in Vietnam in 2014 and operate both car and motorbike taxi services. The two services have been running on a trial basis since early 2016, but have been caught up in a turf war with traditional taxi drivers.

Vinasun took Grab to court accusing the firm of violating tax obligations. Last September, Hanoi Taxi Association said Uber and Grab had been transferring around $150 million overseas every year to evade taxes. Grab denied the accusation.