The impending exit of Uber from Vietnam has prompted local firms to eye a larger slice of the ride-hailing market. At least ten local businesses are reported to be in the process of launching or expanding their businesses to take on Grab.
Vivu Technology Development JSC founder Tran Thanh Nam recently told Forbes Vietnam that Phuong Trang Tourism Service and Transport JSC will invest almost $100 million in the company and rename it as Vato for launch in May. Nam said that Uber’s withdrawal from the market is an opportunity for Vato to develop its business in Hanoi and Ho Chi Minh City.
Meanwhile, one of Vietnam’s leading taxi firms, Mai Linh Group, said that the number of drivers registered to use the company’s technology platform has surged since the Grab-Uber merger.
“Many drivers have contacted us to find out the company policy and apply to be partners, including dozens of former employees who have worked for Mai Linh but then moved to Uber or Grab,” a representative of the 25-year-old taxi firm told local media. As Uber withdraws from the local market, Mai Linh said it plans to expand its business by launching its M.Bike motorbike transport service in Lam Dong, Thai Nguyen, Nha Trang, Can Tho and Quang Ninh provinces.
Similarly, Pham Van Dung, Head of TaxiGo, said that Grab’s acquisition of Uber’s entire business in South East 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.”
This portal had earlier reported that Grab’s arch-rival, Indonesia’s Go-Jek, is also learnt to be preparing to enter Vietnam in what would be its first expansion outside its home market.
As Vietnam sees the entry and expansion of other ride-hailing players, Grab is seen as continuing to dominating the market for the foreseeable future, according to public policy expert Nguyen Minh Duc.
To get an idea of Grab’s scale versus Uber in the country, take a look at a report released by the Ministry of Transport at the end of 2017. Per that report, Grab ran about 18,110 vehicles in Ho Chi Minh City while Uber had about 3,614 vehicles. In Hanoi, the number of Grab’s vehicles was nearly 11,500 while Uber’s was nearly 2,400. “Although there are 10 other local businesses joining in the race, I see the market share of Grab still remaining the same,” Minh Duc added.
However, Vietnamese firms are not dispirited. In the second quarter of 2018, TaxiGo will launch its short-haul services in addition to its existing long-distance car services, a segment where Uber and Grab had not yet joined in. Vato, meanwhile, does not hide its ambition of becoming a connecting platform to help domestic taxi companies bridge the gap between the traditional taxi model and technology-enabled ride-hailing platforms.
In the neighbouring Philippines, three new ride-sharing startups – Go Lag, Owto, and Hype – are in the process of joining the fray. A representative for the country’s Land Transportation Franchising and Regulatory Board (LTFRB) recently told media that the three companies are in the process of completing accreditation before they can start operating.
By Quynh Nguyen, Dealstreetasia.com