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BackHomeStoriesStories CategoriesVietnam In Vietnam's Ride-Hailing Market, It's Grab Against the World. And It's Winning.

In Vietnam's Ride-Hailing Market, It's Grab Against the World. And It's Winning.

Newer ride-hailing apps are struggling to gain a place in the market, despite growing complaints of Grab’s post-Uber services.

When Uber left Vietnam earlier this year, Grab gobbled up most of its customers and drivers, giving the app an advantage no alternative has been able to compete against. VietnamNet reports that local competitors such as TaxiGo, Vivu, T.net, Xelo and Vato lack the resources, or foothold to attract riders.

Services like Aber arrived in the city this year with ambitious plans such as replacing driver commissions with a monthly service fee only for those that reach certain earning thresholds. Others such as FastGo committed to a single per-kilometer rate for riders that, unlike Grab, doesn’t change regardless of peak traffic or weather.

Despite early optimism for the competitors and some strong starts (FastGo attracted 1,500 users on its first day), one would be hard-pressed to locate any of the vehicles amongst the green Grab helmets swarming Saigon streets. Therein lies one reason people are unwilling to switch to them: there are simply too few drivers to make for quick, reliable ride experiences.

The newer companies are failing to compete in part because of funding. With the exception of Vato, which received a US$100 million investment from Phuong Trang Tourism Service and Transport JSC, most are self-funded. This means that they cannot invest in large marketing pushes or offer the types of massive promotions that Grab and Uber relied on when they first arrived.

In contrast to the humble newcomers, Grab is flush with cash. At the end of 2017, Grab received US$2 billion worth of investment from partners and in May, raised an additional US$1 billion from Toyota.

Despite Grab’s overweight coffers, customers are increasingly growing discontent with the company. When Uber left, it stopped providing frequent promotions. As District 4 resident and daily Grab User Tran Thi Kim Hong explained: “They no longer offer discounts as much as before, with prices rising 10-20 percent, and even 50-80 percent during peak hours ...The rates also went up during non-peak hours, especially in areas where there are fewer cars.” Commission rates of drivers have also increased.

The future for ride-sharing in Saigon remains uncertain. Grab is dealing with a situation regarding the legality of their Uber acquisition and recently was dealt a blow when their request to expand to other areas of the country was denied. Go-Jek, Indonesia’s largest ride-share app is set to start its official launch in Saigon imminently and as with seemingly everything in 2018, blockchain is inserting itself into the conversation. Meanwhile, traditional bus and taxi companies are getting in on the action with their own apps, seemingly with little success.


Related Articles:

- Grab Wants to Expand Outside of 5 Localities; Transport Officials Say No

- New Zero-Commission Ride-Hailing Platform to Launch in Vietnam in July

- Vietnam's Ride-Hailing Market Heats up With New Made-by-Vietnamese App Aber