Competition Drives Tensions Between Local Taxis and Grab, Uber

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New cases in which foreigners have been overcharged in traditional taxis, along with incidents in which ride-hailing app drivers have stolen passengers’ belongings, have strengthened the competition between Vietnamese taxi companies and ride-sharing apps like Grab and Uber.

taxiImage source: kinhtedothi.vn

The latest case involves a South Korean tourist who took a taxi belonging to Hai Van Company in Danang City on August 4.

The woman was charged VND700,000 for a five-kilometer ride from Da Nang International Airport to An Thuong 26 Street, while the taxi meter displayed only VND50,000.

She reported the incident to the municipal Department of Transport, which launched an immediate search for the taxi driver.

The driver was summoned and admitted his act. He was ordered to pay the money back and apologize to the passenger. The taxi company said it would also fine and fire the driver.

On May 10, two Israeli women were charged VND510,000 for a three-kilometre ride, which normally costs no more than VND40,000, by a Vina Gold taxi driver in Dalat.

Earlier this year, a Myanmar tourist was charged VND800,000 for a ride from Hoan Kiem Lake to Noi Bai International Airport in Hanoi. The ride usually costs VND200,000.

Following his case, reporters from the news website Soha.vn launched an investigation into taxi scams by posing as tourists in Hanoi’s Old Quarter.

They took several taxis in which drivers pretended that they did not know proper directions in order to increase the distance of the ride or tried to increase fares.

Losing Reputation

For bigger companies like Vinasun, employees have been leaving the company for greener pastures, most likely contracted jobs with Grab and Uber.

Vinasun, the country’s biggest taxi firm has seen nearly 8,000 of its drivers quit in the first half of this year due to the fierce competition with ride-hailing services like Uber and Grab.

The company said in a report that its workforce has fallen by nearly half to less than 9,200 this year. Revenue in the second quarter slid to VND810 billion (US$35.6 million), the company’s lowest since 2014, pulling its first-half income down more than 15 percent year-on-year.

Mai Linh, another major taxi firm, has also said Uber and Grab are the reason it lost nearly VND84 billion (US$3.7 million) in 2016, the company's worst result in five years.

However, these companies have received little empathy from the public.

Vi Nguyen, a member of Otofun, an online forum on traffic-related issues in Vietnam, said she takes Uber or Grab not just because the fares are cheaper but also because she has never been disgruntled by grumpy drivers who complain about short rides.

taxiImage source: dantri.com.vn

“On the other hand, the transparency in fares and good services with journey monitoring make me feel secure when I book a car to pick up my children from school,” she said.

Nguyen Manh Hung, a senior official in the Vietnamese Association for Customer Protection, said at a meeting between taxi companies and ride-sharing apps last month that Uber and Grab won customers thanks to their competitive prices and transparent fare policy.

Thousands of forum users said they would still choose Grab or Uber during rush hour, even though the fares rise, because it’s still convenient and transparent.

Ongoing War

Some taxi companies have launched their own ride-hailing apps in a bid to compete with Uber and Grab.

However, the number of customers using these apps is still small. Customers mostly book taxis via call centers or hail taxis directly.

taxiImage source: jasso.vn

Taxi drivers said many customers don’t know about these apps, allegedly due to a lack of marketing by the companies.

Do Quoc Binh, chairman of Hanoi Taxi Association, told the news website Zing.vn it is hard to tell if these apps will narrow the competition between them and Uber/Grab.

“I think taxi companies are having less competitive advantages than Uber or Grab,” he said.

Nguyen Hong Minh, director of Nguyen Minh taxi company, told VnExpress that competition is growing between the two alternatives in terms of price and service, as Uber and Grab are praised for cost-effective and reliable business practices.

Fare Enough?

However, not all Uber and Grab services in Vietnam are reliable.

Last year there were some cases involving Uber drivers with bad behaviour or who robbed passengers in Vietnam.

And earlier this month, an Australian man who took a GrabCar from Phu My Hung in District 7 to Tan Son Nhat International Airport forgot his belongings in the car.

taxiImage source: kinhtedothi.vn

After he could not board the plane, he called the driver but the driver did not answer and turned his mobile off.

After HCMC police investigated, the driver admitted to stealing the customer’s property. On August 4, the police returned the stolen property to the Australian man.

As reported by Vietnamese transport officials, the taxi market, with the participation of Vietnamese companies and foreign-invested ride sharing apps, will regulate itself and customers will decide which services are more reliable and better for them.

Banner image source: taxihochiminhcity.com

 

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