Uber’s selling of its Southeast Asian business to regional rival Grab does not bode well for both passengers and drivers in Vietnam, as monopoly is clearly in sight when the two-horse race officially ends next month.

Uber announced on Monday it will be combining operations with Grab to elevate ridesharing service to a new level in Vietnam and across Southeast Asia.

“We will be transitioning our services over to the Grab platform by April 8, 2018, so all requests after that date should be made from the Grab app,” the firm said in an email to its app users.

Grab, which will sell a 27.5 percent stake to Uber as part of the transaction, also delivered a similar announcement to its drivers, underlining that the takeover will only allow them to make bigger incomes from their rival’s customers.

However, Grab and Uber drivers, particularly those who drive for both apps, and customers have received the news with little enthusiasm.

The two ride-hailing companies, like other similar tech-based services throughout Asia, have relied heavily on discounts and promotions to attract people to drive for and travel with them.

With no more competition, it is concerned that Grab will offer less promotions to customers, and lower commissions to its drivers.

Two Grab drivers talk to an Uber driver in Ho Chi Minh City on December 17, 2017. Photo: Tuoi Tre

No competition, more worries

Ta Minh Duong, a Ho Chi Minh City resident who has been driving for both apps for eight months, told Tuoi Tre (Youth) newspaper that his income after the April 8 transition mark is now in doubt.

Uber charges its drivers 25 percent of every ride cost, but gives them bonuses ranging from VND5,000 to more than VND40,000 per ride on a frequent basis, Duong said.

Grab sets a lower commission rate, 20 percent per journey, but is not as generous as Uber when it comes to ride bonuses.

“When the two become one and Grab is the only giant player in the game, who knows how it will treat drivers,” Duong said with worries.

Ta Chuong Khang, who became an Uber driver in July 2017, is concerned that drivers will have fewer chances to make long journeys given the broader network of Grab.

“Grab is available in Dong Nai and Binh Duong so we will not be able to take passengers from Ho Chi Minh City to these neighboring provinces anymore, which also means earnings decline,” he explained.

Other drivers said they will be unable to choose which app to work for, based on their customer base, as there is only one option.

An Uber driver named Tai had his Grab account locked after he opposed the company’s commission hike.

“So I switched to Uber and next month I’m not sure if Grab will allow me, having been 'blacklisted,' to work for them again,” he said.

Uber drivers are seen in front of the company's headquarters in Hanoi on March 26, 2018. Photo: Tuoi Tre

From a customer perspective, Quang Phu, a frequent Uber rider in Ho Chi Minh City, wondered whether he would still be able to use promotion codes earned from the service following the takeover.

Nguyen Thi Thuy Hang, who travels by both Grab and Uber, said she had not expected to see the ride-hailing market becomes a monopoly, while Nguyen Thi Lan Dung in Hanoi hopes Grab will focus on building its corporate culture to improve drivers’ behavior toward customers.

Smooth transition ensured

Grab Vietnam director Jerry Lim said the company welcomes and will ensure a smooth transition for Uber drivers if they wish to join its network to make sure all operations will go on normally for both drivers and riders.

The company will also work with these new ‘partners’ and assure them that they will receive the same benefits and bonuses as the existing Grab drivers, Lim added.

However, the Grab Vietnam director did not elaborate on such issues as how many drivers it will take from Uber, whether promotions will be cut, and if service fares will increase.

A Grab driver and an Uber driver are seen on a street in Ho Chi Minh City. Photo: Tuoi Tre

Do Thien Anh Tuan, a lecturer of economics at Fulbright University Vietnam, said Grab’s taking over of Uber's business in Southeast Asia does not necessarily mean bad news for the market.

“Supposing that Grab will actually benefit from its temporary monopoly, this will encourage other investors to jump in the market, bringing back competition,” he said.

“If this is the case, the government should therefore create conditions for other players to join the ride-hailing sector.”

The lecturer added that customers will switch to other travel options if Grab drastically increases fares over its monopoly.

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