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The Vietnam Transportation War: Grab vs Taxis

Since the emergence of mobile ride-hailing services like Grab and Uber, taxis in Vietnam have fallen out of fashion. And they just got more unpopular following a recent taxi driver protest.

Rivals are born

On December 27, 2014 people in Vietnam started to travel differently. Instead of flagging down a taxi, they could simply order a car, motorbike or taxi from their mobile phones using the Grab application. Grab was the first mobile ride-hailing service in Vietnam with Uber close on its heels (four months later).

Why people prefer Grab and Uber

People in Vietnam love Grab and Uber for the same reasons many people around the world have downloaded these applications: They’re faster and cheaper than traditional taxis. They also eliminate the need to carry cash. Vietnamese particularly like these services because taxi drivers in this part of the world tend to overcharge customers by manipulating meters and taking long detours.
Traditional taxi services have lost a lot of market share to these innovative apps. And they’re not happy.

Blowback

In business, things can get cut-throat and this story is no exception. Just last month, Vinasun Taxis, which belong to one of the largest taxi companies in Vietnam, publicly displayed controversial signs. Some signs said: “Uber and Grab must comply with Vietnamese law” or “Grab and Uber must be stopped because of too many inequities in business conditions.” Another sign read: “Uber and Grab have 50,000 vehicles and earn 18 billion VND but contribute only 15.8 billion to the national budget. Where is the rest?"
This protest surprised lots of people. They wanted to know who made the decision to create such a scene. According to Vinasun, drivers spontaneously put up the signs. Shortly after the incident, Vinasun’s directors ordered all drivers to remove the signs opposing Uber and Grab.

The consequences

The act was not cool and could actually be illegal. According to Prof. Nguyen Van Nam, based on some of the sign content, Vinasun could have violated two parts of Vietnam’s Business Law: (1) disrupting business activities of other businesses and (2) publicly announcing business secrets. In both cases, Uber and Grab must prove that they suffered damage from the incident and file charges against Vinasun for authorities to consider legal action.

What do people think?

Since the arrival of Grab and Uber, taxis have become just “life-savers” in case phone batteries die. People care about service quality, which most taxi brands have failed to provide. And after such an embarrassing political incident, their reputation is further tarnished.

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