A Vietnamese company on Wednesday launched ride-hailing app Cudidi with commitments of offering the lowest prices in Vietnam, not collecting commissions from drivers, and providing customers with accident insurance at no charge.

At a ceremony to launch the app, Nguyen Trong Cu, CEO of C&U Vietnam Technical Service Company, explained that the app's concept is similar to that of existing ride-hailing apps. The key distinction, however, is that it is entirely free for drivers.

Cu added that the company developed the app using technology provided by the Vietnamese military-run telecom group Viettel, in collaboration with banks and insurance companies.

App drivers will be given labor contracts and covered by social insurance.

The fee was set at VND25,500 (US$1) for the first two kilometers and VND8,500 (US$0.30) per kilometer from the third kilometer onward for customers booking cars.

Meanwhile, the motorbike ride-hailing service was priced at VND10,500 ($0.4) for the first two kilometers and VND3,500 ($0.1) per kilometer from the third kilometer.

The app operator will refrain from implementing surge pricing during inclement weather, rush hours, or holidays.

C&U Vietnam Technical Service Company also unveiled its plan to keep the price unchanged during the first three years unless there are fluctuations to input costs. 

Cu said his company has cut several costs and only focuses on the operation of its system in order to offer the best possible service prices.

Customers can make payments in cash or via QR codes instead of using intermediate payment apps in order to reduce costs and prevent personal and banking information leakage.

C&U Vietnam Technical Service Company does not collect commissions from drivers thanks its collaboration with banks and insurance companies, Cu informed.

The company also provides vehicle repair and maintenance services to drivers and customers so as to generate revenue.

It can earn some VND2,000 ($0.08) from a ride-hailing service through banking, insurance, and vehicle repair.

Cu explained that if the firm can attract 5,000-7,000 drivers, it could facilitate approximately 500,000 rides per day and achieve profitability after accounting for taxes.

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