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Vietnam court advised to rule in favor of taxi firm in Grab lawsuit

Wednesday, October 24, 2018, 17:22 GMT+7
Vietnam court advised to rule in favor of taxi firm in Grab lawsuit
Representatives of Grab (R) and Vinasun (L) appear at a court in Ho Chi Minh City on October 23, 2018. Photo: Tuoi Tre

Prosecutors in Ho Chi Minh City have advised a court to rule in favor of Vinasun in its ongoing lawsuit against ride-hailing service Grab, in which the local taxi company demanded a hefty compensation bill for losses they claim to have been caused by the tech-based rival.

There are grounds to affirm that Grab has been operating as a taxi company and thus violated a transport ministry scheme on piloting app-based ride-hailing services in Vietnam, the People’s Procuracy of Ho Chi Minh City told a local court on Tuesday.

It was the procuracy’s turn to weigh in on the high-profile lawsuit in which Vinasun accuses Grab of having stolen 74 percent of their customers and having caused losses of VND41.2 billion ($1.77 million) since the latter’s launch in the Southeast Asian country in 2014.

Grab has consistently dismissed such allegations, insisting that the firm has operated pursuant to local laws and regulations.

According to public prosecutors, Grab was categorized as a passenger transport company – the same as Vinasun – in the first business registration certificate it obtained in Vietnam issued by the municipal Department of Planning and Investment.

Under a 2016 transport ministry decision, Grab was allowed to pilot its business model as a company providing technological solutions to connect drivers and passengers in Hanoi, Ho Chi Minh City, Da Nang, Khanh Hoa and Quang Ninh for two years between January 2016 and January 2018.

However, in reality the company has been recruiting drivers, setting ride fares and rolling out promotions, all practices typical of a conventional taxicab firm, the prosecutors noted.

From 2014 to 2017, Grab reported losses of VND1.7 trillion ($72.84 million) due to advertising and marketing costs, despite having a charter capital of only VND20 billion ($857,000), they added.

Grab representative Jerry Lim (L) speaks to the media after a court on October 23, 2018. Video: Tuoi Tre

Therefore, “there are grounds to affirm that Grab is a taxi company,” the municipal procuracy said.

According to documents provided by Vinasun, 74 percent of their customers have turned to Grab as of the time of the lawsuit.

The Singapore-based company reported revenue of VND738 billion ($31.63 million) in Vietnam in 2017, which is proof of its growth in the local market, the prosecutors pointed out.

Compared to 2015 figures, Vinasun’s profits in 2016 and the first half of 2017 dropped by VND41.2 billion, the company claimed.

The prosecutors therefore advised the court to rule in favor of Vinasun and demand Grab to pay one-time compensation of VND41.2 billion as requested by Vinasun in its lawsuit.

Judges said at Tuesday’s court they need more time to review both sides’ arguments as well as the prosecutors’ opinion.

A final ruling on the case will be made at 2:00 pm on October 29, they said.

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Tuan Son / Tuoi Tre News

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