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​Vietnamese ride-hailing apps set to rival Grab after Uber exit

​Vietnamese ride-hailing apps set to rival Grab after Uber exit

Monday, April 02, 2018, 11:21 GMT+7

Uber exiting Vietnam and other parts of Southeast Asian has opened up opportunities for Vietnamese companies to cash in the ride-hailing sector.

With only one major rival left to fight with–Malaysia-based Grab–Vietnamese businesses are pushing effort to improve their own apps to grab a bit more market share.

"Vietnamese firms are motivated to increase investment for their ride-hailing apps after Uber withdrew from Southeast Asia,” Tran Thanh Nam, the founder of Vivu, a smartphone app allowing people to hail private cars or motorbikes, told Tuoi Tre (Youth) newspaper.

Vivu itself has received a whopping US$100 million investment from local passenger bus operator Phuong Trang, and was rebranded VATO, Nam added.

In order to compete with Grab, Vietnamese apps should have features that do what their strong rival cannot do.

In the case of VATO, the killer feature is ‘bargaining,’ allowing riders negotiate the fare with their drivers, according to Nam.

“The bargain will be based on the minimum price set by VATO, and this is what either Grab or Uber could do,” he said proudly.

A screenshot of the VATO app. Photo: Tuoi Tre News
A screenshot of the VATO app. Photo: Tuoi Tre News

Another strength is that VATO charges riders VND8,500 a km, similar to that of GrabCar, but the revenue split for drivers is only 20 percent, compared to 25 percent of the foreign app.

Nam said Vivu has received 2,000 applications from car drivers, and 500 of them are active. The rebranded VATO app will be officially launched in Hanoi and Ho Chi Minh City within this month, he added.

“We are committed to offering incentives for both drivers and customers to familiarize them with our service,” he said.

Nam has reasons to feel upbeat about the future, with the daily downloads of his app doubling to 200 only one day after Uber announced its exit from the Southeast Asian market.

Phuong Trang CEO Nguyen Tri Dung also confirmed to Tuoi Tre that his company channeled $100 million into VATO, adding one product into its e-commerce ecosystem.

A UberMoto driver and his customer are seen in front of Saigon Train Station in Ho Chi Minh City. Photo: Tuoi Tre
A UberMoto driver and his customer are seen in front of Saigon Train Station in Ho Chi Minh City. Photo: Tuoi Tre

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 found the transition to be no good news. Some Uber drivers are ex-Grab employees and are now unable to return to their former app. Others are concerned that they will lose all incentives, including a lower revenue split, when joining the Grab network.

Mai Linh, one of the leading Vietnamese taxicab operators who also has its own ride-hailing app, said a number of Uber car and motorbike drivers have applied to join the company.

Mai Linh chairman Ho Huy said the company will grab this opportunity to rival Grab, with some distinctive features.

“With Mai Linh Bike, we only ask for a revenue split of 15 percent and will cover 100 percent of the costumes fees for any driver who makes at least VND2.5 million ($110) a month,” Huy said.

A group of Mai Linh Bike drivers are seen in this photo provided by the company.
A group of Mai Linh Bike drivers are seen in this photo provided by the company.

Mai Linh Bike charges riders VND11,000 for the first two kilometers, and VND3,700 each from the third kilometer onward. Huy underlined that the service will not collect premium for bookings made during rush hours.

The company will also buy insurance for drivers who are in service for six months in a row.

Economist Bui Quang Tinh said Vietnamese ride-hailing apps should fill in the void left by Uber’s exit to expand their market share and bring in more choices for local commuters.

“Those who provide the best service will be the winners,” he said.

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Son Luong / Tuoi Tre News

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