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Drivers Go on Strike to Protest Grab's Increase in Commission Rate to 23.6%

One of Vietnam’s most popular ride-hailing applications, Grab, is facing criticism after it announced an increase in commission rates not long ago.

Tuoi Tre reports that yesterday morning, January 10, hundreds of GrabBike drivers congregated at one of the company’s offices in District 10’s Big C Supermarket to voice their disapproval of Grab’s decision. Starting from January 1, 2018, the firm increased its commission rate to 23.6%.

Previously, Grab only took 20% of each ride’s fee, while drivers kept the rest. The newspaper shared that at 8am yesterday, hordes of drivers gathered in the vicinity of the Sala New Urban Area near Tran Nao Street in District 2 before making their way to the company office.

However, according to Tuoi Tre, at the premise, they were only asked to enter an enclosed conference room for “discussion” while Grab delayed handling the complaints until next week.

Apart from seeking answers from Grab, many drivers also called for a boycott starting in the morning, during which they would turn off the app or even book “ghost rides” to hijack the system, preventing customers from getting rides.

On the company’s side, it told the news source that the hike in commission rate is due to personal income tax duties of drivers. According to Grab, in 2016 and 2017, it helped out drivers with paying this tax using its own money. But from this year, this amount will come from drivers’ income.

Specifically, the company will maintain its 20% commission rate, billed as service fees for the app. Additionally, Grab will also take 4.5% – including 3% in VAT and 1.5% in personal income tax – of the remaining 80% of income per ride to pay personal income tax. In total, this will amount to 23.6% of income for each ride.

A Grab representative also added that at the moment, the threshold for income tax duties is VND100 million per year, or approximately VND8.3 million per month. Every month, Grab will temporarily subtract an according amount from each driver’s e-wallet. If, by the end of the month, the driver’s actual earnings don’t reach VND8.3 million, the subtracted amount will be repaid on the 10th of the following month.

Many drivers, however, are still upset as Grab already announced a hike in commission rates from 15% to 20% last September, just four months ago. Nguyen Tuan, a GrabBike driver, told Tuoi Tre that the company’s transport fee is already so cheap compared to taxis and traditional xe ôm and the company is constantly expanding its driver base, making it harder for everyone to making a living.

“Now, the cost of the uniform is already VND400,000 and the maintenance fee for the app is VND20,000 per driver while it used to be free,” Tuan elaborated. “We’re not sure why Grab decided to hike up the commission rate so much while every other cost like gas, phone balance and bike repairs fall onto us.”

[Photo via Thanh Nien]

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