Uber’s selling of its business in Southeast Asia to Grab appears to hit its own drivers harder than its regional rival’s, at least in Vietnam.
From April 8, all Uber rides will have to be made via the Grab app, meaning Uber drivers should either join the latter company or stop working in the ride-hailing service.
The transition is part of the transaction in which Grab will take over Uber operations in Southeast Asia. Uber will be entitled to 27.5 percent of Grab’s shares in return.
Uber drivers are unhappy with the sudden move, as switching to working for Grab is easier for some.
|An Uber car picks up passengers in Ho Chi Minh City. Photo: Tuoi Tre|
One Uber driver told Tuoi Tre (Youth) newspaper that he has to register a new Grab account and is subject to an exorbitant revenue split of 25 percent, complete with a 3.6 percent individual income tax deduction, with the app.
Drivers who currently have to split only 20 percent of revenue per ride with Uber understandably find the rate set by Grab to be absurd.
Hoang Minh, a Hanoi-based driver, said he has contacted Grab to ask if the 20 percent rate he currently enjoys with Uber will be maintained following the transition, and the answer is “no.”
A Grab representative also confirmed to Tuoi Tre that Uber drivers have to create a new account, subject to a 28.6 percent revenue split, when they want to join Grab.
Many Uber drivers have complained that following the takeover, Grab should have kept all the policies of Uber to ensure the rights and interests for the company’s partners.
The troubles of Uber drivers have become opportunities for their Grab peers. Some Grab drivers are putting their accounts, eligible for a lower commission rate of only 20 percent, for sale at up to VND3 million ($132).
Grab drivers also have 3.6 percent of their income per ride deducted for personal income tax, so the final rate is 23.6 percent, still lower than the 28.6 percent meant for new drivers.
One Grab driver asks VND2.5 million ($110) for his account, saying the transfer procedure is as simple as going to the company’s headquarters and declaring that he has sold his motorbike.
However, one Grab consulting employee asserted to Tuoi Tre that any driver found allowing others to use his or her account will be banned from the app for good.
|A woman enters a Grab car at Tan Son Nhat International Airport in Ho Chi Minh City. Photo: Tuoi Tre|
For some Uber drivers, it is impossible to move to work for Grab even when they accept the high commission rate.
These are ex-Grab drivers who have their accounts blocked permanently for ‘violating the rules’ when they opposed the company’s high revenue split in the past. They thus left Grab for Uber, and there are now no way back, sending them to put their cars on sale.
Nguyen Thanh Tien, an Uber driver, is seeking buyers for his VND300 million ($13,216) Kia Morning after knowing that he could not have his blocked Grab account reactivated.
“I have no reason to keep the car,” he said.